Tesla Motors Successfully Fights Off Auto Dealership Assault in North Carolina
June 27, 2013 2:36 PM
comment(s) - last by
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
, 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
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.
This article is over a month old, voting and posting comments is disabled
RE: Why the Fight?
6/28/2013 8:49:00 AM
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?
6/28/2013 9:56:07 AM
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?
7/3/2013 11:53:32 PM
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.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
New York Bills Try to Ban Tesla Stores, Protect Auto Dealerships
June 24, 2013, 9:31 AM
Tesla's Battery Swap Only Takes 90 Seconds, Costs $60-$80
June 21, 2013, 9:24 AM
The Fall of Fisker Automotive: A $35,000 Loss on Each Karma, Lavish Spending and Misinformation
June 17, 2013, 5:03 PM
Tesla Repays $465 Million DOE Loan 9 Years Early
May 22, 2013, 10:20 PM
Tesla CEO Elon Musk Willing to Take Auto Dealer Fight to Federal Level
April 16, 2013, 12:13 PM
Study Predicts Self-Driving Vehicles Could Rake in Billions
March 6, 2015, 8:34 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Quick Note: GM Teases Next Generation Chevrolet Volt
November 20, 2014, 3:26 PM
Most Popular Articles
America's Largest Cable Company, Comcast, Sees Internet Subscriptions Pass TV
May 4, 2015, 2:46 PM
Chromebooks Expected to See Sales Grow 26 Percent to 7.3 Million Units This Year
May 22, 2015, 1:26 PM
The Pirate Bay Loses Its Iconic Swedish Dot SE Domains
May 20, 2015, 6:31 PM
Rockstar Games' Parent Sues BBC Over Unauthorized "Grand Theft Auto" Drama
May 21, 2015, 6:05 PM
Buzzfeed, NatGeo, NBC, and NYT Pay to Push Stories to Your Facebook Feed
May 13, 2015, 4:31 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information