Idea on how Tesla Motors can get around state bans

[Zzzz...]

What if that dealership network was a non-profit company?

How about non-profit dealership that sells only barely USED teslas at a price of new ones?
Such dealership would be able to give a test drives freely to anyone. It would be able to educate potential customers about price. It would be able to have stores in malls etc. It would not need to establish service centers - but Tesla itself got no problem with putting SC even in Texas.

The only thing - such dealership will not sell a lot of cars. So Tesla might have to donate something. But think of it as a price of advertisement.

 

[adiggs]

The core problem is that a single franchise in a single state of the union, will be a precedent for franchises in every other state of the union. That might even become the right choice for Tesla (I lean towards not, but that's a theory - not a fact), but I think we're all pretty clear that going to franchises all across the country NOW isn't in the cards. At soonest, that's for Gen 3 volume production, and I tend to think that's 1M+ units/year at the soonest.

My real thinking is that I hope Tesla builds their own network of mfg owned service centers and showrooms (as well as doing better with body shops / more certified / better competition there), and stays away from the dealership model.

But they can't break the precedent anywhere, without releasing a flood everywhere.

 

[Phoster]

How about a new rental car company that specializes in pure electric vehicles (you could throw in a couple of Leaf's and i3's to keep it generic). Provide a knowledgeable and friendly staff that is more than happy to go over all of the details of cars with potential rental customers; you know, for safety purposes. Allow rental customers to take short trial drives with a rental agent to help decide which vehicle, if any, they would like to rent. This could also ensure the rental customers are comfortable with regenerative breaking (safety first).

You could set up the rental office in a mall in Ann Arbor or similar locations to cater to the "green" crowd. Have a Model S in the front of the office to facilitate orientation of rental customers who may not be familiar with electric vehicles. Provide computer kiosks in the lobby so customers can easily obtain additional information from the manufacturer's web sites while they are waiting to speak to a rental agent.

Perhaps this rental company could partner with PlugShare or similar organization and operate as a non-profit on a mission to educate the public about EV's. Tesla, Nissan, and BMW could choose to philanthropically support this effort if they so desire.

 

[Robert.Boston]

I concur with the Indian reservation idea, but recommend Tesla start with a Service Center in a reservation in Michigan. This says that Tesla will do whatever it takes to take care of their customers. Make sure the press highlights Tesla's philosophy that Service Centers are not intended to make a profit. This will shine a light on Michigan dealers' hidden agenda and the real reason behind the protectionist laws; to keep the OEMs out of the service arena. It is common knowledge that dealers make huge profits on maintenance, but even so the MADA will not want this fact brought into the conversation.

There are several Indian reservations in Michigan; unfortunately, none near Detroit:

 

[AndreN]

Seems like for Detroit, Tesla could use Windosr, Ontario as a location for at least a service center.

 

[Phoster]

True, there aren't any reservations close to Detroit but the Potawatomi reservation south of Battle Creek would be reasonably close to several population centers. It could even take some of the load from Ohio, a state which limits the number of Service Centers that Tesla can operate.

The $100 valet charge we pay to have our cars transported to Columbus or Chicago for service doesn't come close to covering the costs to Tesla. With dual-motor Model S and Model X coming next year, I expect the number of Tesla's in Michigan to increase significantly. Factor in more owners up near Traverse City or Petoskey and the time delay and cost to Tesla for transport cars out of state for service will become prohibitive. Tesla will have to either; 1) get the law changed, 2) set up SC's in reservations, or 3) increase their valet fee.

Note that Michigan's law doesn't even allow OEM's to pay third party repair facilities for warranty work. Independent franchised dealers are the only authorized places to have this done. I for one never had much confidence in the competence of dealership service departments, so trusting that they replaced that air bag properly never left me with a warm fuzzy.

Setting up Service Centers in reservations is certainly not an ideal solution, but it could be good PR and a way to keep the debate going. The more this topic is reported in the press, the more pressure will be put on the state house representatives and senators to justify their sell out to the MADA.

 

[Robert.Boston]

Hmm, the Alabama-Coushatta Tribe of Texas controls nearly 4,600 acres near Livingston, TX, which is about 70 miles north-east of Houston. Not exactly convenient for a showroom.

 

[Xenoilphobe]

Sounds like a 501C setup

- - - Updated - - -

move the service across the border to Canada.

 

[physicsfita]

Sounds like a 501C setup

- - - Updated - - -

move the service across the border to Canada.

The problem with going to Canada is that while more Michiganders have the necessary travel documents than people in other states, it's still not common. Pre 9/11, all you needed was your driver's license and birth certificate. Post 9/11, you have to have either a passport, a passport card, an enhanced driver's license (harder to get and more expensive than a regular one), or a NEXUS card. These restrictions killed a lot of business in Windsor, including my favorite dim sum place. :crying:

 

[macpacheco]

Until Tesla can handle all of its backlog and can handle much higher demand levels, I see NO reason to even entertain this idea. Some customers are buying Teslas partly to stick it up to NADA and Detroit. I think Elon knows this. Probably not until the Giga Factory gets to 25% capacity in 3ish years.
The EV credit is expiring soon in a few countries, Tesla needs to see what demand will look like after all of those expirations take place.
I think Tesla can get to at least 100k MS+MX deliveries/year in the current system, perhaps even double that.

 

[Phoster]

Demand is not a problem which is precisely why I believe the focus at this point should be on deploying service centers rather than stores. Wait times for getting service in this region are getting to be a problem and it will be worse when deliveries of dual-motor MS and MX begin. I am not saying dual-motor units will need more service, although they might initially, but many people up here were waiting for all-wheel drive. As the number of vehicles increases, transporting them out of state for service will not be sustainable.

 

[Chris TX]

Hmm, the Alabama-Coushatta Tribe of Texas controls nearly 4,600 acres near Livingston, TX, which is about 70 miles north-east of Houston. Not exactly convenient for a showroom.

With an actual store on the reservation, that could be the central point of sales for the entire state! Keep using the Galleries in Dallas, Houston, and Austin (and whatever else TM has planned) but the store on the A-C land could help with delivery, titling, and registration. Right now, we have to deal with the temporary California registration which is a pain for some.

Hell, that would even get Texas customers the TERP $2500 rebate! That extra $2500 rebate for every Tesla sold in Texas could be enough motivation to get it done.

 

[Phoster]

I concur that Tesla should place an actual store on the A-C reservation in Texas for the reasons that Chris TX stated above. Texas has three service centers and a fourth planned. That seems rather thin for a state the size of Texas, but perhaps they are limited in number as in Ohio. Michigan law does not allow even a single service center, so I think Tesla should definitely investigate the idea of locating service centers in reservations.

 

[bollar]

I concur that Tesla should place an actual store on the A-C reservation in Texas for the reasons that Chris TX stated above. Texas has three service centers and a fourth planned. That seems rather thin for a state the size of Texas, but perhaps they are limited in number as in Ohio. Michigan law does not allow even a single service center, so I think Tesla should definitely investigate the idea of locating service centers in reservations.

Tesla doesn't have any restrictions on adding additional Service Centers in Texas, but almost all of the cars are in DFW, Houston, Austin & San Antonio, so they're already covered -- my guess is the only SCs coming in the medium term would be another SC on the other side of Houston & one around Fort Worth.

As for the reservation idea -- I'd like to see how things go this legislative session first.

But... For those of you interested, Alabama-Coushatta is actively looking for various types of economic development through ACT Holdings, LLC. They are exploring a couple of retail projects, a greenhouse and a JV to make cable harnesses. So, maybe there's an opportunity.

 

[Red Sage]

I believe that one of the provisions in the Great State of Texas for their EV Tax Credit/Rebate is that the vehicle must be purchased in the state from an 'independent franchised dealership' and must also appear on a given list of eligible cars. Tesla Motors vehicles cannot meet either requirement currently. This allows Texas politicians to say they are in favor of EVs on one hand, while pimp-slapping Tesla Motors with the other.

 

[TexasEV]

I believe that one of the provisions in the Great State of Texas for their EV Tax Credit/Rebate is that the vehicle must be purchased in the state from an 'independent franchised dealership' and must also appear on a given list of eligible cars. Tesla Motors vehicles cannot meet either requirement currently. This allows Texas politicians to say they are in favor of EVs on one hand, while pimp-slapping Tesla Motors with the other.

Not so. The vehicles must be sold in the state to be eligible. As Teslas aren't "sold" in Texas they are not on the list of available EVs. There is no mention of independent or franchised in this law or regs, that's the dealer franchise law. Of course it has the same effect but the EV rebate law doesn't specify how cars have to be sold to be eligible, just that they are sold in Texas.

Your signature line is relevant for that post.

 

[Saghost]

Not so. The vehicles must be sold in the state to be eligible. As Teslas aren't "sold" in Texas they are not on the list of available EVs. There is no mention of independent or franchised in this law or regs, that's the dealer franchise law. Of course it has the same effect but the EV rebate law doesn't specify how cars have to be sold to be eligible, just that they are sold in Texas.

Your signature line is relevant for that post.

I'm still thinking it won't work for the rebate, though. We're using the fact that the reservation is legally federal land not subject to state laws to avoid franchise laws, but then saying it is in the state for the purposes of rebates?

I'm thinking you probably can't have it both ways here. But I'm not a lawyer, and I know they sometimes find the most remarkable ways to interpret things...
Walter

 

[Red Sage]

Yes, so. This form specifies that you must, "Verify that you are purchasing an eligible all-electric vehicle from an approved dealership."

Electric Vehicle Rebate Application (PDF)

It continues with, "Austin Energy will verify eligibility and determine the incentive amount is based on the type of all-electric vehicle(s) purchased."

And also states, "In order to receive the incentive, I understand that the all-electric vehicle(s) must be on the approved vehicles list."

This list specifies, "Only new electric and plug-in hybrid vehicles purchased or leased from a dealer or leasing company licensed to sell or lease new vehicles in Texas may qualify. Vehicles purchased or leased directly from the manufacturer or from an out-of-state dealer or leasing company will not be eligible."

List of Eligible Vehicles for the LDPLI Program

This very succinctly bars Tesla Motors vehicles from being able to qualify for the rebate. Since there are no 'approved dealerships' for new Tesla Motors vehicles in Texas, the Model S is not on the approved vehicles list.

And when I'm right, I'm right.

 

[bollar]

Yes, so. This form specifies that you must, "Verify that you are purchasing an eligible all-electric vehicle from an approved dealership."

Electric Vehicle Rebate Application (PDF)

It continues with, "Austin Energy will verify eligibility and determine the incentive amount is based on the type of all-electric vehicle(s) purchased."

And also states, "In order to receive the incentive, I understand that the all-electric vehicle(s) must be on the approved vehicles list."

This list specifies, "Only new electric and plug-in hybrid vehicles purchased or leased from a dealer or leasing company licensed to sell or lease new vehicles in Texas may qualify. Vehicles purchased or leased directly from the manufacturer or from an out-of-state dealer or leasing company will not be eligible."

List of Eligible Vehicles for the LDPLI Program

This very succinctly bars Tesla Motors vehicles from being able to qualify for the rebate. Since there are no 'approved dealerships' for new Tesla Motors vehicles in Texas, the Model S is not on the approved vehicles list.

And when I'm right, I'm right.

You're looking at the wrong program, but you're basically correct:

The LDPLI is currently accepting applications for the purchase or lease of new eligible vehicles powered by compressed natural gas (CNG), liquefied petroleum gas (LPG), or electric drive (plug-in). To apply for a Rebate grant under the LDPLI, applicants must purchase or lease from a dealership or leasing company authorized to sell or lease new vehicles in Texas.

Light-Duty Motor Vehicle Purchase or Lease Incentive Program

There are leasing companies in Texas who could qualify for the rebate, but Model S isn't on the approved car list, so I don't know if they are eligible or not.

 

[TexasEV]

Yes, so. This form specifies that you must, "Verify that you are purchasing an eligible all-electric vehicle from an approved dealership."

Electric Vehicle Rebate Application (PDF)

It continues with, "Austin Energy will verify eligibility and determine the incentive amount is based on the type of all-electric vehicle(s) purchased."

And also states, "In order to receive the incentive, I understand that the all-electric vehicle(s) must be on the approved vehicles list."

This list specifies, "Only new electric and plug-in hybrid vehicles purchased or leased from a dealer or leasing company licensed to sell or lease new vehicles in Texas may qualify. Vehicles purchased or leased directly from the manufacturer or from an out-of-state dealer or leasing company will not be eligible."

List of Eligible Vehicles for the LDPLI Program

This very succinctly bars Tesla Motors vehicles from being able to qualify for the rebate. Since there are no 'approved dealerships' for new Tesla Motors vehicles in Texas, the Model S is not on the approved vehicles list.

And when I'm right, I'm right.

Where do you see the words "independent franchised dealership" in this? We're not disputing that they have to be sold by a dealership in Texas, that's why Tesla is not eligible because Tesla is not sold in Texas, but what I was saying was this emissions control rebate law did not specify "independent franchised dealership" as you said. If the dealer franchise law changed so Tesla could get a dealer license, they would qualify for this rebate program without having to change this emissions rebate law too. The emissions rebate law doesn't specify the car has to be sold by a "independent franchised dealer" which were your words that I was disputing.