IOWA DMV pushed by dealerships to block Tesla test drives

[TexasEV]

1. It isn't a "test drive".
2. You have to register for the event. It can't be done at any time like a dealer style test drive.

That's what was done in Iowa. People signed up in advance and it was a one-time thing over 3 days, just like is done in Texas. Texas allows a limited number of these "manufacturer" events and Tesla has to register them in advance. Apparently Iowa is even more restrictive than Texas in this regard.

 

[bonnie]

How is the 'experience Tesla' event different from what they offered in Iowa?

1. It isn't a "test drive".
2. You have to register for the event. It can't be done at any time like a dealer style test drive.

And probably 3. The employees offering the "Experience Tesla" events are not involved in the sales process.

That's what was done in Iowa. People signed up in advance and it was a one-time thing over 3 days, just like is done in Texas. Texas allows a limited number of these "manufacturer" events and Tesla has to register them in advance. Apparently Iowa is even more restrictive than Texas in this regard.

Right. That's exactly what was done in Iowa. People had signed up in advance (see post #15 in this thread). And the Iowa DMV, after being alerted by a dealership, stopped the event because they believed it to be a sales activity & in violation of Iowa law.

It appears that either Iowa DMV will need to rethink their definition of 'sales activity' or the Iowa legislature will need to rewrite the law to allow sales activities by manufacturers, in addition to dealerships.

 

[TexasEV]

It appears that either Iowa DMV will need to rethink their definition of 'sales activity' or the Iowa legislature will need to rewrite the law to allow sales activities by manufacturers, in addition to dealerships.

Or third option, Tesla has another event, Iowa DOT fines Tesla for an unlicensed sales activity, and Tesla appeals to a court to challenge the DOT interpretation of the law (which a google search shows does not have the phrase "test drive" anywhere it it). Tesla wins wither way-- this would being Tesla more national publicity and expose the auto dealer cartel even more than the New Jersey situation earlier this year.

 

[bonnie]

Or third option, Tesla has another event, Iowa DOT fines Tesla for an unlicensed sales activity, and Tesla appeals to a court to challenge the DOT interpretation of the law (which a google search shows does not have the phrase "test drive" anywhere it it). Tesla wins wither way-- this would being Tesla more national publicity and expose the auto dealer cartel even more than the New Jersey situation earlier this year.

Or Tesla is cast in the light of 'willfully ignoring the law'. A few well-placed newspaper articles could easily turn public opinion against them. Hard to say which way to play it - but I'm sure they're evaluating options.

 

[Rheazombi]

The garbage about "protecting consumers" gets me the most. These regulations hurt CONSUMERS and their ability to enjoy a FREE MARKET. Not to mention Tesla takes better care of their customers than any dealership I've ever encountered.


As for purposely incurring the fine, I doubt Tesla would do it, but I'm positive at least the entire internet would be on their side. Nearly every comment on news articles relating to the banning of Tesla sales, random people, many of whom can't afford a Tesla, seem downright livid that something so ridiculous is able to happen in 'Capitalist America', lol.

I don't think Tesla necessarily wants that kind of publicity though, and I assume they still have some other cards up their sleeve.

 

[crmatson]

Here is the letter I sent in the the Des Moines Register last week:

I was disappointed to read (Iowa Curbs Tesla Test Drives, Joel Aschbrenner, Sep 25, 2014)
that there is little being done in the state legislature to allow the citizens of Iowa a chance to test drive and purchase a Tesla Motors vehicle in person. Because each state regulates automobile sales, the National Automobile Dealers Association and their affiliated state associations have been lobbying state legislatures to aggressively block Tesla sales nationwide. In my opinion, Iowa lawmakers have a unique opportunity to review state regulations and make changes that reflect our 21[SUP]st[/SUP] century economy.

Instead of blocking them, Iowa should encourage an innovative company like Tesla to open galleries, stores and service centers in the state, providing jobs to Iowans and offering the consumer more choices. Even members of the Federal Trade Commission wrote in favor of Tesla back in April noting that regulators should differentiate between regulations that truly protect consumers and those that protect the regulated. They also urged lawmakers to recognize efforts by auto dealers seeking to bar new sources of competition because they express of a lack of confidence in the competitive process, which only hurts consumers.

Furthermore, Tesla is American company making environmentally friendly electric vehicles, which have received numerous awards and the highest safety rating of any car ever tested by the National Highway Traffic Safety Administration. Iowans, and our lawmakers, pride ourselves on being leaders in renewable energy. We can and should be looking for ways to encourage innovation in the automobile industry and the marketplace. It’s time to allow consumers to decide if a Tesla is worth their consideration and not just give in to the automobile dealers fear of competition.

They published a different letter here:
Lawmakers should fix these restrictive car laws

 

[TexasEV]

Both are great letters.
Another point that hasn't been mentioned before, according the article the auto dealer lobby complained one afternoon and DOT sent an investigator the next day. That seems unusually fast for a government agency dealing with a complaint. I wonder how long it takes DOT to send an investigator when a consumer files a complaint against a dealer. If it's significantly longer than the next day, it's consistent with the DOT regulator being a tool of the dealer cartel.

 

[bonnie]

EV Iowa (EV group) will be hosting a ride/drive event in Iowa City on Oct. 18th.

Since it is not run by Tesla & these will be owners' cars, this will not be an issue with the DMV. If any of you are within a day's drive of Iowa City, it would be a nice show of support to be at the event. PM me for details.

 

[dsm363]

Great work to all the Iowa people doing this!

 

[chickensevil]

Uh...what am I missing here? Tesla isn't insured? Tesla doesn't have physical service centers? Tesla routinely fails to deliver vehicle titles to the buyer?

I didn't see this answered and it is likely where they are getting their standing. Tesla doesn't have physical stores/service centers in the state of Iowa. So for all intents and purposes when it comes to these types of situations each state might as well be a different country. Having a service center in, say Germany and selling a car in France claiming you could just get it serviced in Germany would not mean you had a place to go to easily as a consumer to have your car repaired.

While in practice Tesla would make it much easier to have your car serviced than the experience of shipping to a foreign country, on paper that is generally the perception and way things are looked at. This is probably where they are getting their legal standing from on the subject and it is a tough situation since I don't think they are able to set up a service center in Iowa right now because of other laws that are preventing them from doing that.

Nothing is stopping you from buying the car in another state and bringing it across the boarder and registering it in Iowa, but they are certainly going to make it as hard as possible for people to be able to really get a chance to see and experience a Tesla unless either A: The laws are changed or B: Tesla caves to their demands.

- - - Updated - - -

to add this:

You can see from the map that right now Iowa is a barren wasteland when it comes to Tesla. All they have in the state is one sponsored charger at an Inn in Davenport (which is almost in Illinois.

The service center that would likely handle most of Iowa cars that would be bought is being built in Omaha, NE. Otherwise there is nothing going on in this state right now... It isn't until 2015 where they finally have on the map to put in a SuperCharger at Des Moines and Davenport... and that is pretty much it for Tesla in the state right now. I hope to see this change but I fear a lot of it comes down to the laws which need to change.

Good luck to Iowa, if there is anything I can do to help way over here in VA let me know! (I am close to D.C. If that helps anything )

 

[TexasEV]

I didn't see this answered and it is likely where they are getting their standing. Tesla doesn't have physical stores/service centers in the state of Iowa. So for all intents and purposes when it comes to these types of situations each state might as well be a different country. Having a service center in, say Germany and selling a car in France claiming you could just get it serviced in Germany would not mean you had a place to go to easily as a consumer to have your car repaired.

While in practice Tesla would make it much easier to have your car serviced than the experience of shipping to a foreign country, on paper that is generally the perception and way things are looked at. This is probably where they are getting their legal standing from on the subject and it is a tough situation since I don't think they are able to set up a service center in Iowa right now because of other laws that are preventing them from doing that.

I don't think it has anything to do with service centers. Tesla doesn't have a dealer license in Iowa and isn't going to get one because it is a manufacturer. The question is does it need a dealer license to have test drive events. DOT says yes, which seems to be another example of regulatory capture (the well known phenomenon of regulators serving the interests of the industry being regulated rather than the public interest). Even in Texas, which has the strongest dealer protection laws in the country, Tesla has been allowed to have a limited number of manufacturer test drive events.

 

[GoBlue88]

There are zero Aston Martin dealers/service centers/stores in Iowa. I bet that if Aston Martin wanted to hold a test drive event in Iowa, the IADA would have zero issue with it.

 

[austinEV]

Dealer competition...

 

[chickensevil]

Dealer competition...

View attachment 60547

This is great! Did you make this? Mind if I take it?

 

[Lanny]

The Des Moines Register just published a story.

Minnesotans offer test drives of banned Teslas in Iowa

"Paul Steier, director of the DOT's Bureau of Investigation and Identity Protection, said the individual Tesla owners offering test rides aren't violating any state laws as long as they are not employed or commissioned by Tesla Motors."

Link to article.

Lanny

 

[WarpedOne]

Time to start TEDx events?
Tesla Experience Day - Independent

Organized, publicized and produced by owners of tesla cars.
Viral marketing is so last century

 

[dalalsid]

Time to start TEDx events?
Tesla Experience Day - Independent

Organized, publicized and produced by owners of tesla cars.
Viral marketing is so last century

Someone needs to start a website where volunteer owners put up locations and dates where they will provide test drives and people can register for them. I'm willing to help (software wise) if someone is willing to spearhead the effort. But at this moment I'm crunched for time. Might have some later this month or next month.

 

[Red Sage]

austinEV: Yes, that's a great graphic. They do indeed compete for the right to mark up prices. It goes well with something I wrote elsewhere:

I'm pretty sure that if forced to sell through 'independent franchised dealerships' at this juncture, the amount that Tesla Motors currently charges as retail would not go down for the benefit of that distribution system. It would effectively become their wholesale amount, because Tesla has already determined how much money they must make per car in order to properly expand. Thus, if the 'independent franchised dealerships' were to be presented with a $69,900 Invoice price for the Model S 60, then they would mark that up to 'what the market can bear' for retail sales.

I recently saw an interview with a guy from NADA who claimed that on average 'independent franchised dealerships' have a 'razor thin' margin of only 2.2%... This is far worse than what I've heard 'independent franchised dealerships' claim in times past, because they said there was about a 5% margin on average. Personally, I believe both estimates are a bald-faced lie at worst, and absolute balderdash at best.

Their 'out' is the word 'average', of course. I think they count that so-called 'average' only after all conceivable expenses for the entire fleet of new cars parked on the lot, rather than being clear about how much they literally make on a per car basis. I think they add up all the worst case scenario expenses for financing, upkeep, and missing sales targets. I think they don't include the 'holdback' amounts, incentives, and bonuses from 'factory cash' they receive. I think they don't point out the huge intake they make from used car sales of trade-ins. I think they also leave out the money that they make from their Service Departments. They are disingenuous about everything financial, just to make it seem as if 'independent franchised dealerships' are 'the little guy' in the transaction.

If the 'independent franchised dealerships' get their way, the Tesla Model S 60 will sticker for $105,000 and the Model S P85D will cost $250,000. The base version of the Model ☰ might not ever come out at all, or would be released for $60,000 -- three-to-five years late. It would not allow Tesla Motors to accelerate the advent of sustainable transportation at all. It would slow them down to a crawl, and threaten to destroy the company utterly. And Naysayers would be able to rejoice in their eternal claim that, "They ONLY make TOYS for the RICH!"

Imagine all those people who have posted in favor of haggling with 'independent franchised dealerships' and their supposed glee at being able to 'negotiate a better deal' to break down prices... So that they would only pay $95,000 for a car they would have bought from Tesla Motors for $69,900 without the middleman. Oh, but at least they can say, "I didn't pay MSRP!" Yeah, right. Whatever. Never mind the middleman behind the curtain.