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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

Tesla Motors landed a major win in North Carolina this week when the state threw out a bill that attempted to block the automaker from selling its vehicles directly to consumers

A North Carolina House committee denied the bill Tuesday, which would have banned Tesla from selling its Roadster and Model S vehicles to consumers instead of auto dealerships in the state. 

Also, Sen. Bill Rabon (R-Southport) said a separate bill -- which would update franchise dealer regulations -- could be rewritten in such a way that Tesla's business model could be protected. 

The Senate's Commerce Committee approved the bill to kill Tesla's anti-dealer model in May. The bill was unsurprisingly backed by the North Carolina Automobile Dealers Association (NCADA). 

North Carolina Governor Pat McCrory and House Speaker Thom Tillis took test drives in the Model S back in May and were reportedly thrilled with the experience. 

Tesla CEO Elon Musk has been fighting for the right to sell his clean vehicles directly to consumers without having to use auto dealerships as middlemen. However, auto dealers have been furious about this model because it takes business away from them.

Musk said he is open to a dealership model at some point when sales increase, since dealerships do promote competition and keep prices down. But that time isn't now. 

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. 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.


Tesla CEO Elon Musk

However, Tesla lost this fight in both Texas in Virginia. 

But Tesla has been successful in other states, such as New York, where a pair of bills (referred to as A07844 in the Assembly and S05725) tried to make it illegal to license -- or even renew licenses -- for all Tesla Stores within New York state borders. These bills were killed off on Monday. 

This latest win in North Carolina further proves that Tesla is a force to be reckoned with in the American auto industry. The company was approved to receive a $465 million loan from the U.S. Department of Energy (DOE) in June 2009, which was part of the Advanced Technology Vehicles Manufacturing program. The loan was to be repaid by 2022, but in March of this year, Tesla received permission to pay the loan back five years early by mid-2017. 

However,  Tesla managed to repay the whole sum last month -- nine years earlier than expected from the original 2022 due date. This was mainly due to its decision to issue more stock the week before. Tesla said it wanted to sell about $830 million in shares, and use $450 million in convertible senior notes (which are due in 2018) along with sales of 2.7 million shares (valued at about $229 million at the time) to pay back its federal loan. This is an especially crucial detail in Tesla's history, considering other plug-in hybrid electric automaker Fisker Automotive (which also received a DOE loan) has failed miserably

Before that, Tesla started shipping 500 Model S sedans per week starting in March of this year, exceeding the sales outlook of 4,500 posted in the February shareholder letter. In fact, Tesla managed to sell 4,900 Model S sedans in the first quarter. The automaker plans to deliver 21,000 total for the year, which slightly exceeds previous forecasts of about 20,000. 

For Q1 2013, Tesla reported a net income of $11.2 million (a huge increase from an $89.9 million loss in the year-ago quarter). Excluding certain items, Tesla's profit came in at 12 cents a share, which was a boost from a loss of 76 cents a share in Q1 2012. Analysts expected a profit of about 4 cents a share. Revenue also saw a huge year-over-year boost, totaling $562 million (up from $30.2 million in the year-ago quarter). 

On top of profitability and being debt-free, Tesla has been working hard to push new tech in the EV sector, such as its recent battery swap tech that takes only 90 seconds to complete and costs $60-$80. This is meant to extend range when there isn't time for a full recharge on the road. Tesla realizes that easing customer worries associated with EVs will lead to increased sales, and it seems to be working for the company so far. 

At present, Tesla has only sold about 100 vehicles in North Carolina. 

Source: Autoblog Green



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RE: Why the Fight?
By DT_Reader on 6/27/2013 4:57:31 PM , Rating: 3
Because it isn't about setting up new Tesla dealerships, it's about existing dealers becoming Tesla dealers. The NADA doesn't want more members, they want to protect their existing members. Knowing this, why would Tesla want to join them? If you were Tesla, would you want a dealer who sells 1000 gas powered cars a month being the exclusive dealer for your electric powered car, with a potential market of maybe 4-5 cars per month? How much effort is that dealer going to put into selling Teslas?

Chevy dealers love the Corvette, not because they sell lots of Corvettes, but because Corvettes get people into the showroom. GM doesn't care, because either way those customers are buying Chevys. Using their Tesla franchise to get people into the showroom, then selling them a Ford, Chevy, or Toyota, may do the dealer a lot of good, but it doesn't do anything for Tesla.


RE: Why the Fight?
By cladari on 6/27/2013 8:37:49 PM , Rating: 2
If you sell 6 or 7 Tesla cars a year how much money are you going to invest in the tools and expertise to maintain them?


RE: Why the Fight?
By SublimeSimplicity on 6/28/2013 8:49:00 AM , Rating: 3
You hit on what I believe is the crux of the problem. Tesla dealers would mostly not be only Tesla dealers. They would also be owners of Chevy, BMW, Audi, etc dealerships.
Dealers make A LOT... and by a lot, I mean most of their money off of maintenance and repairs.

Do you know what the maintenance schedule is for a Tesla? Rotate the tires every 10k. There's only so much you can charge for that.

What's going to fail? The battery pack? Which have been shown to be replaceable by a robot in under 2 minutes. The motor? Those things that run non-stop in factories for decades?

Now if I'm a dealer, I'm not sure I'm going to steer customers looking to pay $60k-$100k on a Tesla to the Tesla's I sell, but probably to the other cars I sell. In fact I might run a constant shortage, never able to get those damn things in... destroying Tesla's image.


RE: Why the Fight?
By Masospaghetti on 6/28/2013 9:56:07 AM , Rating: 2
That, and I don't think dealers necessarily add to the buying experience.

I would rather buy direct and avoid the hard selling, ridiculous mind games that dealerships and salesmen use.


RE: Why the Fight?
By GotThumbs on 7/3/2013 11:53:32 PM , Rating: 2
This is exactly why I will never purchase a new car, nor will I ever purchase a vehicle from a dealer.

Dealers are the foundation for the bad taste in the word "Salesman".

My last 6 vehicles were all purchased from individuals or through eBay (last 3) and I have been very please with all of them. I still have the last 3 vehicles I purchased.

Dealers simply organized mafia and are for suckers IMO.

Best wishes,


"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins














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