Tesla has no need to deal with any existing dealership. If they are forced to open one they can do business only with someone not affiliated past or present with any auto dealership, give them free inventory not for sale cars and require them to sell at MSRP with no "dealer added value". From some calculations that Tesla bear Logical Thought did, tesla sells 3-400 cars/store/year. If Tesla paid 2% MSRP to the dealer in commissions then the dealer stands to make 350*100,000*0.02 = 700,000. Is that enough to operate a Tesla-only store? This is only for Model S. Add 50% (my estimate) more when the X comes out and god knows how much more when the Model 3 comes out.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Michigan passes bill to ban Tesla!
- Thread starter Joel
- Start date
-
- Tags
- Tesla Inc.
adiggs
Well-Known Member
There's a slippery slope here - if Tesla enters into a single dealership agreement anywhere in the US, they need to be ready to go full dealership network everywhere. Once that precedent is set, you can be sure that every state dealer's association will use that if necessary to force it to happen in their state. Avoiding the precedent is important enough that I think Tesla doesn't do business directly in Michigan for the time being while demand is so far in excess of what the company can produce.
That day might even arrive, but I think that day is not today. (I tend to think that in fact, Tesla will be better off never slipping on the yoke of the franchised dealerships, even when they're doing millions of units a year, but that's the opinion of a naïve outsider; not somebody in the car business).
snellenr
Member
Hmmm... The Isabella Indian reservation in Mt. Pleasant might be a nice, central location for Tesla to sell & service their cars -- as well as thumb their noses in the general directions of Lansing & Detroit.
RobStark
Well-Known Member
Miss. dealers won't file appeal against Choctaws
The Choctaws purchased a Ford dealership just outside reservation land and Mississippi franchised dealers had a hissy fit.
The Choctaws could have petitioned the Bureau of Indian Affairs to have the land added to the reservation.
Eventually, the Choctaws caved save for paying federal taxes.
But putting a Tesla Store on reservation land, paying some sort of tax to the Tribe, would be an interesting test case.
The Choctaws purchased a Ford dealership just outside reservation land and Mississippi franchised dealers had a hissy fit.
The Choctaws could have petitioned the Bureau of Indian Affairs to have the land added to the reservation.
Eventually, the Choctaws caved save for paying federal taxes.
But putting a Tesla Store on reservation land, paying some sort of tax to the Tribe, would be an interesting test case.
I found this interpretation online:
Under the harsh terms of the amendment, Tesla can't even operate service centers in the state!
However, the words dealer and location are not defined in the legislation, but a reasonable interpretation of the bill would define a dealer as one holding a dealer agreement, and location would mean corporate domicile. If those interpretations are upheld in court, then there is no "dealer" because there is no dealer agreement. If they insist that Tesla is a dealer even without a dealer agreement, then there is a provision of the legislation that says the entire legislation does not apply to dealers not located in Michigan. Since Tesla is the "dealer" as well as te manufacturer, and the dealer is located in California (headquarters office) and Delaware (state of incorporation), the law does not apply to Tesla!
Under the harsh terms of the amendment, Tesla can't even operate service centers in the state!
However, the words dealer and location are not defined in the legislation, but a reasonable interpretation of the bill would define a dealer as one holding a dealer agreement, and location would mean corporate domicile. If those interpretations are upheld in court, then there is no "dealer" because there is no dealer agreement. If they insist that Tesla is a dealer even without a dealer agreement, then there is a provision of the legislation that says the entire legislation does not apply to dealers not located in Michigan. Since Tesla is the "dealer" as well as te manufacturer, and the dealer is located in California (headquarters office) and Delaware (state of incorporation), the law does not apply to Tesla!
I nominate Lloyd to the Supreme Court now. Add a judge. Even if he found it online.:smile:
Its all about the interpretation.
Its all about the interpretation.
physicsfita
Member
Believe it or not, that's the law already -- even the Big 3 can't create service centers, even if they only handle recalls. The amendment would get rid of Tesla's ability to have galleries and to advertise.
tdelta1000
Active Member
I call it the killing of Capitalism. Capitalism is based on the premise that anyone with an IDEA can become a success if they put in work and Tesla Motors has put in the work.
Gov. Snyder made his fortune with Gateway Computers. Gateway opened stores and sold direct to the public. That didn't work out so well for them, but even so he should understand a manufacturer wanting to sell directly to customers. People writing him might use the analogy that if there was a computer dealer cartel 20 years ago similar to the auto dealer cartel, Gateway might have been prevented from selling its computers directly to the public. Why should cars be any different?
talk about Michigan bill?
Hi there,
I cover Tesla Motors for the San Jose Mercury News and would like to speak with Model S owners who live in Michigan. Is there a good time to reach you Monday?
Warm Regards,
Dana Hull
[email protected]
Hi there,
I cover Tesla Motors for the San Jose Mercury News and would like to speak with Model S owners who live in Michigan. Is there a good time to reach you Monday?
Warm Regards,
Dana Hull
[email protected]
bonnie
I play a nice person on twitter.
I know people here are wary of the media (& with good reason) -- but I'll vouch for Dana anytime. Just an fyi.
Aric Nesbitt introduced the bill to the Michigan Legislature. I see he is a Hillsdale graduate. As National Review calls Hillsdale the conservative Harvard. Not sure I agree with that, but OK.
I find it troubling that politicians forget what they learned back in school days to be overcome by the political greed of campaign contributions. Wouldn't letting companies succeed or fail on their own merits and business model be the best for Michigan and our nation? Nope guess not Aric.
I find it troubling that politicians forget what they learned back in school days to be overcome by the political greed of campaign contributions. Wouldn't letting companies succeed or fail on their own merits and business model be the best for Michigan and our nation? Nope guess not Aric.
Similar threads
