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Auto dealers are backing the bills in an attempt to uphold current sales models

Tesla Motors may see its stores banned in New York thanks to a pair of bills that look to protect auto dealers. 

Tesla has its own “Tesla Stores”, which act as showrooms for customers. There, they can see the models and even test drive them before making a purchase online from the Tesla website. Tesla does this as opposed to selling its vehicles to auto dealerships

But a new pair of bills, referred to as A07844 in the Assembly and S05725, may put an end to that in the state of New York. The bills would make it illegal to license -- or even renew licenses -- for all Tesla Stores within New York state borders.

In addition to a ban on renewing licenses for existing Tesla sites, the bills also make it illegal to license any future stores; amends New York's vehicle and traffic laws regarding "unfair practices by franchisors," and prevents New York from issuing/renewing the registration of any car dealer where a manufacturer holds a controlling interest (unless that certificate was issued before July 1, 2006).

The bills were submitted just before the New York Legislature adjourned for the summer. This means that they will sit in the New York State Assembly until January 2014 when it returns. No decisions were made regarding the bills before it adjourned.


As you can probably guess, Tesla isn't too happy about this. The electric automaker issued a statement last week regarding the bills:

The bottom line for New York consumers and New York suppliers is that if this bill passes, special interests in Albany will once again have gotten their way while robbing New Yorkers of choices in the marketplace, and Tesla will be put out of business in New York. The result would be that all of Tesla’s New York employees will lose their jobs.  It means that New York-based suppliers to Tesla will lose business and New York consumers cannot buy the most advanced electric car in the world today. Banning Tesla from selling its vehicles is also a step in the wrong direction for reducing carbon vehicle emissions and the green environmental movement in New York.  With the State of New York pushing so hard to lead green innovation supporting entire agencies for energy efficiency like NYSERDA, it is absolutely defies logic to ban Tesla from selling electric cars in New York.

From the beginning, Tesla’s goal has been to catalyze the market for electric vehicles and selling through intermediaries at this stage of the company will not work.  For Auto Dealer Associations to claim that restricting competition is in the best interests of the public is wrong and defies obvious common sense.  If we are kept out of New York, it forestalls progress and defeats innovation.

Tesla has created jobs in New York at both its stores and service centers and the sales of its vehicles go into supporting the local economy. Tesla remains committed to bringing electric vehicle technology and its customer focused sales and ownership experience to New York consumers, while complying with all local and state laws.

Back in April of this year, Tesla CEO Elon Musk openly fought for a Texas bill that would cut out the use of auto dealerships. The bill -- House Bill 3351 -- would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships. The bill was filed by Rep. Eddie Rodriguez (D-Austin). 

Musk even said that if the fight for the Texas bill came down to a federal matter, he would either lobby Congress to pass legislation for the direct sales of EVs made by startup companies like Tesla (and tie it to an energy or transportation bill) or file a federal lawsuit to fight the state restrictions as unconstitutional violations of interstate commerce.

Musk is open to a dealership model at some point when sales increase, since dealerships do promote competition and keep prices down. 

Source: Green Car Reports



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RE: Unbelievable
By lolmuly on 6/25/2013 11:35:23 AM , Rating: 2
Ayn Rand's fears are completely valid, it's her solutions that I find naive.

The big flaw in her capitalist utopia is business ethics. Take a look at the kieretsu system in japan. Imagine ditching a big client and bankrupting your company. If that client refuses to pay on time, breaks its obligations, and pays you barely above cost for your product, what can you do? You can't sue, you can't expand, you can't innovate. This isn't just a japanese phenomenon, it happens all the time on large and small scales, businesses will always jump at the opportunity to enslave one another.

Now there's a fair argument to be made that allowing your business to be put in that situation should be punished, but why should doing business with a company larger than your own be so suicidally risky? Take away the regulations, take away the protections, and very few companies will move up or down the chain.

Should somebody ever be forbidden from selling to whomever they wish? Never, but businesses who employ these practices should be liable (within demonstratable reason) for the destruction of a business they've chosen to engage with.


"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone














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