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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: Hard to sell cars without dealers
By omgwtf8888 on 5/14/2013 4:06:24 PM , Rating: 2
It appears from a post 2 down, that Tesla has already moved to a quasi-dealer format. But, the servicing is the part that will need to be addressed. If you are asking should the government intervene in having or not having dealerships I would say NO!. I personally believe that North Carolina's proposed law is a restraint of trade and should run afoul of the commerce clause of the Constitution.

Most likely what N.C. wants is a single dealer located in their State so the can get their sales tax. Much easier then having to track down all of the Tesla purchasers and get your money.


By lelias2k on 5/15/2013 5:31:21 PM , Rating: 2
Well, keep in mind that this is NC. Home of Nascar. And the biggest dealership owners in the US. ;)


By somedude1234 on 5/15/2013 5:53:45 PM , Rating: 2
quote:
Most likely what N.C. wants is a single dealer located in their State so the can get their sales tax. Much easier then having to track down all of the Tesla purchasers and get your money.


This is easy enough to enforce when you register the vehicle to obtain your state-issued license plates and registration sticker (or whatever your local state uses). You settle up on the taxes as part of the registration process. This is how it works in most places for used vehicle purchases.

Also, how hard would it be for NC to tell Tesla: sure, direct sales, no problem, just make sure you collect our sales tax for us and forward it along. That's one entity to deal with instead of N dealers.


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