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Bill sponsor received $8,000 in campaign donations from the North Carolina Automobile Dealers Association

Living in the Research Triangle Park (RTP) area of North Carolina, which I nickname Silicon Valley East, I quite frequently see Tesla Model S sedans and Roadsters silently cruising down city streets and interstates. However, the North Carolina Senate Commerce Committee unanimously approved a measure that would make it illegal for Tesla Motors to sell vehicles directly to customers without the ever-present "middleman" in new car transactions: car dealerships.
 
Not surprisingly, the NC Automobile Dealers Association (which represents North Carolina's franchised car dealership) is behind this latest stab at Tesla. But according to NC ADA President Robert Glasser, this isn't an attack specifically aimed at Tesla. Glasser notes that the precedent Tesla has set for direct sales could set into motion a chain of events that would topple the entire dealership model of business.
 
“We care about the franchise system,” said Glaser. “The whole point of the retail system is to protect the consumer.”
 
Of course, Tesla Motors sees things quite differently. “They’re trying to insulate the dealer franchise model from any competition,” said Diarmuid O’Connell, Tesla’s VP of Corporate and Business Development. “It’s a protectionist move to lock down the market so we have to go through the middleman – the dealer – to sell our cars.”

And here's an interesting tidbit that shines a whole new light on the story. Slate reports that Sen. Tom Apodaca, the Republican sponsor of the bill, received $8,000 in campaign donations (the maximum allowed by state law) from the NC ADA.
 
It's pretty clear to see why dealerships are shaking in their boots at the prospect of Tesla (and other auto manufacturers) selling directly to customers. Tesla managed to deliver a whopping 4,750 Model S sedans to customers during the month of April. Compared to other luxury sedans that also dance in the $70,000 to $100,000+ price range, the Model S outpaced monthly sales of the Audi A8 (1,462 units), BMW 7-Series (2,338), Lexus LS (2,860) and Mercedes S Class (3,077).

 Tesla Model S
 
Tesla has sold 80 Model S sedans in North Carolina and has an additional 60 orders in queue from residents. The overwhelming majority of those sales have come via the internet.
 
And one could argue that an electric vehicle like the Model S needs less attention from dealerships due to the much lower maintenance needs of the electric motor and battery pack. Quite simply, there is potentially less to go wrong with a Model S compared to BMW 750i with its twin-turbocharged V8 and 8-speed automatic transmission.
 
Despite this new speed bump in Tesla's road to electric vehicle proliferation, the company has been showered with a wealth of good news in the past week. Last week, Tesla reported its first profit in its ten years of existence and Consumer Reports gave the Model S a near perfect rating: 99 out of 100 possible points.
 
Tesla's stock is up 57 percent since its quarterly earnings were released last Thursday to just under $90/share.

Sources: News Observer, Slate



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RE: lolwut?
By kingmotley on 5/14/2013 12:27:44 PM , Rating: 4
Oh, well, point me to a dealership where I can buy a Camero ZL1 for retail. Nevermind anything reasonable above what they charge, I'm just asking for retail. Nope. All dealers charge $5k to $7 over and above the retail price.

That is what you get when you force monopolies into the dealers.


RE: lolwut?
By Motoman on 5/14/2013 12:36:21 PM , Rating: 1
I'm not familiar with the ZL1 myself, but I assume it's a limited-edition unit that's in higher demand than there's supply.

Ergo...price goes up. Same thing happens to any item that has limited supply and high demand. Not just cars.

Regardless, as you noted, that's happening from the *dealerships* now. And it's perfectly legal...they can legitimately get more for the car because it's in such high demand and limited supply. There's not a legal issue there.

I don't know what point you're trying to make.


RE: lolwut?
By Adonlude on 5/14/2013 1:10:19 PM , Rating: 3
And for that the rate just went up 10%...

Legislating dealers into business is total BS. Why do we allow Apple stores to exist? Where is the middle man there?


RE: lolwut?
By Motoman on 5/14/2013 1:51:30 PM , Rating: 4
There isn't one. And there isn't a need for one.

I really don't know what point was under attempt with the Camaro post up there.

The fact of the matter is there's no possible grounds upon which to force cars - and only cars - to have to be sold through middlemen.

It makes no sense.


RE: lolwut?
By Reclaimer77 on 5/14/2013 7:21:13 PM , Rating: 3
I agree with you but if that's the way it is, than it's unacceptable to give a special exemption to Tesla "just because".

If everyone else has to sell their vehicles through dealerships, then so does Tesla.


RE: lolwut?
By topkill on 5/14/2013 8:40:49 PM , Rating: 2
Reclaimer,
I don't get your logic. It's clear the law is wrong, so the answer isn't to screw "yet one more manufacter". The answer is to fix it for everyone, not keep on screwing anyone else that comes along. We, the consumers, are getting hurt by this.

Frankly, this is government getting involved in our lives and I can't believe you aren't screaming about it.


RE: lolwut?
By Reclaimer77 on 5/14/2013 8:54:18 PM , Rating: 3
Where did I say I'm in favor of the law?

To be honest I have no idea what goes on between dealerships and manufactures on the business side and if it's beneficial to both. For me to arbitrarily weigh in on that would be speaking from ignorance.

I'm merely stating that the law should either be repealed, or applied equally. I'm not in a favor of granting Tesla a special exemption. That's all I'm saying.

quote:
Frankly, this is government getting involved in our lives and I can't believe you aren't screaming about it.


Yeah well if I screamed every time the Government got involved in our lives I would be like one of these crazy guys with a zillion posts on some Internet blog or...

Oh,wait.... :(


RE: lolwut?
By topkill on 5/15/2013 1:19:45 PM , Rating: 2
LOL Points taken.


RE: lolwut?
RE: lolwut?
By jmunjr on 5/14/2013 8:31:57 PM , Rating: 2
I bought the very first Nissan GT-R in Houston in 2008 for MSRP, a car that had way more appeal and demand than the ZL1. Sure, most people paid over sticker at first, but I didn't because I shopped around and scored a deal. That is how the free market works. If everyone just settled and bought products for the price they were told then the free market would fail, but consumers care about price and do shop around and price rises and falls accordingly.

Th ZL1 is a specialty car, if that dealer was able to mark up ALL of their inventory then obviously something would be amiss. It is not a monopoly when one product is prices over the suggested retail price, it is the market correcting itself. If dealers can sell the ZL for that markup it is because that is what buyers are willing to pay because it has high demand and a low supply.


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