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Tesla Model S
A North Carolina House committee denied a bill that tried to stop Tesla from selling directly to consumers

Source: Autoblog Green





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RE: Why the Fight?
By MindParadox on 6/27/2013 3:35:28 PM , Rating: 5
Because dealerships increase costs, simply by inserting themselves in between the manufacturer and the consumer?

Simple logic here, the more links in a sales chain, the more expensive the item becomes, because every link has its own overhead to make up

so say the car from the manufacturer costs 12,399
they sell it to the dealership.
The dealership then has to make a minimum of 12,399 on the car simply to make back what it paid the manufacturer.
then they are going to add all kinds of markup on that to cover the overhead(employees at the dealership, owners' salary, etc)

final cost to the consumer? on average, around 18k or more on a car that cost the dealership 12k


RE: Why the Fight?
By Reclaimer77 on 6/27/2013 3:45:07 PM , Rating: 1
quote:
Because dealerships increase costs


More than a long and drawn out legal fight in all 50 states??

Look I'm not defending the status-quo, but honestly, this is the classic "uphill battle" if there ever was one.

And let's say he wins 50% of his battles. That still leaves MILLIONS of Americans who have no realistic convenient option to view, test drive, and purchase his vehicles.

However your explanation was excellent, and I thank you.


RE: Why the Fight?
By Guspaz on 6/27/2013 6:05:56 PM , Rating: 5
There are a few problems:

1) The margin on electric cars is much lower than gasoline cars, so dealers would have an incentive to try to sell gasoline cars instead of electric cars

2) Dealers make most of their profit from maintenance, and electric cars tend to require less maintenance since they have less moving costs

The problem is not that dealerships can't work for Tesla, just that they can't work right now. Only when electric car production costs have been driven down (increasing margins) and consumer demand is high enough to negate the maintenance disincentive will it be a viable option.

The dealers don't actually care about Tesla selling their cars. Tesla is such a tiny portion of the car market that they're not even a drop in the bucket. What the auto dealers are worried about is that Tesla will set a precedent, and that somebody like Toyota or Ford or GM might start trying direct sales.


RE: Why the Fight?
By Rukkian on 7/1/2013 12:19:08 PM , Rating: 2
Most states have a provision that any manufacturer that sells less than a certain amount of vehicles (say 5k/month) do not need to have a dealership. This is due to the overhead that is involved if you are just a niche player (which Tesla is right now). The problem comes from the NADA trying to change the law in several places to force Tesla to use dealerships, and effectively insert a guaranteed middleman instead of allowing sales directly. In Texas, they already had something on the books, and Tesla tried to change it to allow them to sell direct.

I have no problem if car companies want to sell through dealerships, I just have a problem with government (of any level) requiring the use of a middle man. If I want to buy a car direct and save some money, I should be allowed to, if the manufacturer agrees.


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