FTC Goes To Bat For Tesla: Says States Shouldn't Limit Tesla Sales Model
from the good-for-them dept
We've pointed out how states banning Tesla's direct sales model seems like a perfect indicator of how corrupt a state is. State laws that require that only independent dealers can sell cars have no legitimate purpose whatsoever -- other than to make life better for dealers, who have tremendous influence over local politics. However, it looks like the FTC may be stepping in to tell states who go in this direction that they may be crossing the line in a way that will make the federal government unhappy. In a surprise blog post, some FTC officials have made it pretty clear that states shouldn't be blocking Tesla direct sales.In buying cars, however, these new ways to shop may not be available to consumers. For decades, local laws in many states have required consumers to purchase their cars solely from local, independent auto dealers. Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries.Later on the FTC fires the real warning shot:
This very question has been raised across the country, as a still-young car manufacturer, Tesla, pursues a direct-to-consumer sales strategy that does not rely on local, independent dealers.
In this case and others, many state and local regulators have eliminated the direct purchasing option for consumers, by taking steps to protect existing middlemen from new competition. We believe this is bad policy for a number of reasons.
Instead of “protecting,” these state laws became “protectionist,” perpetuating one way of selling cars—the independent car dealer.The FTC completely dismisses the bogus claim from dealers that these laws "prevent abuses" by noting "this rationale appears unsupported." It's not clear if the FTC will actually step in and do anything here, but just making it clear that these kinds of laws blocking things like Tesla's sales model are a serious problem that is more protectionist than good for consumers, is a good step.
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Filed Under: autodealers, car sales, consumer protection, ftc, independent dealers, protectionism, sales models
Companies: tesla
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Helpful?
At least it is on record. I do not expect much from the states. Several or more of them might take it as Federal interference. The dealerships will take it as felony interference of their business model. Sounds like a long slow slog.
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Re: Helpful?
Back Off OHio
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Re:
Don't worry, it's in a case where they don't have any authority to actually make a difference.
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Re:
Tesla's success says that their policy was a good idea and any further success on their part vindicates them further. If Tesla were to for example eventually make gas cars fully obsolete they could still claim some credit for enabling it.
While they may be potentially doing it for selfish reasons in this case it is doing good.
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Who can sell
There are a number of other products for which this sort of thing was established decades ago.
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Re: Who can sell
It works like this: Manufacturer comes first, distributor came afterwards because of demands for it. Not the other way around, the manufacturer doesn't OWE the distributors anything.
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The Comcast Principle
The NADA needs to fire whatever lobbyists they're using and get someone with a better inside track. If Comcast can completely "capture" the FCC, then NADA can certainly do the same with the FTC. And as Comcast has discovered, it's an investment that pays off in spades.
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Re: The Comcast Principle
No need. The state laws they already have are working fine. They don't need federal protection on top of that.
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The way I've got it figured, dealerships are a legitimate business model, and so is direct-to-customer. The Ford dealership I got my current car from had surprisingly good customer service, and I wouldn't want to see them shut down, but I think Ford should be allowed to sell cars directly to customers too, and let the customer decide which version they prefer to use. Likewise, once Tesla comes out with mass-produced cars, let Tesla dealerships spring up throughout the country if someone wants to start them, and let the public decide whether to buy from them or from Tesla.
Anything less than that is an insult to free-market principles.
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electric cars, worlds biggest con!
People are so stupid they don't think how much energy is needed to make the final product and realise its less efficient, more distinctive and putting more power intk the hands of the few, again!
Tesla is not a good company and them not bei g able sell cars is just a distraction so you don't look at he serious loop holes with electric cars by using your brains!
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Re: electric cars, worlds biggest con!
Also, the design of the Tesla looks too 'sports car' like and will probably encourage drivers to go at unsafe speeds. No car should be fully electric! At most they can hybrids, and should be made to look as absurd as possible, like the prius or volt.
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Re: Re: electric cars, worlds biggest con!
Also, the design of the Tesla looks too 'sports car' like and will probably encourage drivers to go at unsafe speeds.
This looks like a sports car to you?
https://www.google.com/search?q=tesla+model+s
And don't worry, most drivers are smarter than you and don't speed because of how their cars look. I know that was rude but I couldn't resist. Or maybe just didn't want to resist.
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Re: Re: Re: electric cars, worlds biggest con!
http://jacobfoxx.com/wp-content/uploads/2013/08/tesla-model-s.jpg
...the point is that we don't know anything about these Tesla people, whereas Ford is a large company with lots of people working for it. There is a reason that the volt and prius look the way they do. There is no reason why a fully electric car like the Tesla should be masquerading as a regular car. It should say, through it's design that it's not just like every other care. Will people who buy this car accidentally, be able to return it? Are there consumer protections in place?
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Re: Re: Re: Re: electric cars, worlds biggest con!
Just so we're clear, you think people are buying Tesla Model S cars thinking they're gasoline powered?
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Re: Re: Re: Re: electric cars, worlds biggest con!
Assuming the answer is 'yes', anyone that boneheaded either has money to burn, or is likely dead broke from falling for every two-bit scam or 'special offer' they run across.
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Re: electric cars, worlds biggest con!
THIS STATEMENT IS SIMPLY UNTRUE.
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Re: electric cars, worlds biggest con!
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Re: electric cars, worlds biggest con!
Here's some:
"The Model S battery is guaranteed by Tesla Motors for eight years or 125,000 mi (201,000 km) for the base model with the 60 kW·h battery pack. All models with the 85 kW·h battery pack are guaranteed for eight years and unlimited miles.[72]
A battery replacement option may be purchased for a cost of US$10,000 for the 60 kW·h battery and US$12,000 for the 85 kW·h battery and will provide a replacement battery anytime after the 8th year of operation of the original battery.[73]"
In case you're not a paid shill, I can't believe people in their right mind would think that burning liquified dinosaur corpses (which will run out in the near future, already sparking conflicts and war. aka US War on Tehror) at 20% efficiency is somehow more progressive than using a power source that can be produced much more environment friendlyer (like nuclear power plants, renewable energy etc)
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Re:
Wrong federal agency. It seems that in Washington, if one agency "regulates" an industry, all the others must keep their hands off, apparently.
That's why the FDA was unable to ever touch tobacco products due to health concerns, because the ATF oversaw the tobacco industry -- despite the fact that the ATF has always been a tax-collection agency unconcerned with public health issues.
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Re: Re:
That's why the FDA was unable to ever touch tobacco products due to health concerns, because the ATF oversaw the tobacco industry
Well, they can now:
http://www.fda.gov/AboutFDA/Transparency/Basics/ucm194423.htm
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Re: Re: Re:
The ATF's regulation 'stable' also keeps the Consumer Product Safety Commission from regulating firearms -- unquestionably one of the most dangerous consumer products on the market.
These federal agencies can essentially do anything they want, interpreting laws (and expanding on them) as they see fit, and the only thing that effectively stops them is a competing federal agency claiming the turf as their own. It's funny how a whole branch of government sprang up completely outside the Constitution, and these unelected lawmakers grew into the most pervasive authorities of this modern nanny-state we live in.
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Dealerships Are An Indispensable Part of Process
How many people are going to get home and then realize that they have to plug in their new car. As far as I know, there are no laws protecting consumers in that regard.
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Re: Dealerships Are An Indispensable Part of Process
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Re: Re: Dealerships Are An Indispensable Part of Process
Dealerships provide service before, after, and during the life of the vehicle. You can't just appeal to the lowest common denominator like some sort of Costco mattress bin.
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Re: Re: Re: Dealerships Are An Indispensable Part of Process
So people who want the assurance of knowing there's a local dealer they can take their car to can buy that way. What's wrong with allowing another way of buying too? And do you think people should be prohibited from buying a car unless there's a dealership servicing that brand in their home town? If not, how is buying from a company with no dealerships any different?
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Re: Re: Re: Dealerships Are An Indispensable Part of Process
Yes, and you already can buy a car online with ebay. Or carsales.com.au, or drive.com.au, other places too.
All you need is a spec sheet, some ability to use google to find out anything you don't understand, or maybe ask your more knowledgeable friends. Consumer review sites too.
Actually, one thing a dealership is good for, somewhere to go to test drive a car before you order it online.
There's a reason car salesman are used as the butt of jokes regarding:
1) high pressure sales tactics;
2) lieing;
3) overcharging.
Because they do all of the above.
"Yes love, you really need the genuine $600 floor mats, you can't trust those $30 auto-parts store ones that are made of the same material and probably come from the same production line in china"
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Re: Dealerships Are An Indispensable Part of Process
The arrogant cry of middlemen everywhere. The dealer has no more interest in educating a customer properly than the manufacturers, they want to sell them the most expensive model that will meet the customers need, with the highest trim level that they can get the customer to spring for.
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Re: Re: Dealerships Are An Indispensable Part of Process
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Re: Re: Re: Re: Dealerships Are An Indispensable Part of Process
You're simplifying a very complicated buying process, and perhaps for you, in your income range, it's okay, because at most, you're only losing a couple of grand. It's like mattresses, people who have money know that you want to go a specialized store which only deals with mattresses and have expertise in the mattress industry. Same thing with cars. You want to stick with professionals, who know the business.
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Re: Re: Re: Re: Re: Dealerships Are An Indispensable Part of Process
No, you should go to your credit union. Generally they'll take good care of you.
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Re: Re: Re: Re: Re: Dealerships Are An Indispensable Part of Process
If the dealerships offer all of that value, why are they so worried about competition from online in the first place then? If your sales pitch really is the truth, then no one will want to purchase online anyways because they don't offer all of that....um.....stuff you mentioned.
As an aside: Your sales pitch doesn't really sound all that great to me personally, it sounds like you'd rather have an uninformed customer over someone with knowledge and that's not someone I really want to do business with.
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Re: Re: Re: Dealerships Are An Indispensable Part of Process
Voted funny.
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Re: Re: Re: Dealerships Are An Indispensable Part of Process
Don't forget the invaluable fabric guard!!! And the must-have pin stripes and floor mats.
There's a special place in hell for you charlatans. The rustproofing you charge and arm-and-a-leg for voids most manufacturers own rust warranty.
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Re: Dealerships Are *NOT* An Indispensable Part of Process
It's common knowledge that a car dealer has only one concern to the exclusion of all else: to close the deal and extract as much money as possible out of a customer. Let's not confuse "educate" with sales pitch .
A car salesman is just about the most disreputable profession around, and everyone knows it. The only good thing I can say about dealerships is that "hard sell" techniques have largely gone out of fashion. I suspect especially in states that issue concealed handgun permits. I know I would have been tempted to shoot my way out that tiny office room with up to three barroom-bouncer-type guys at a time blocking the door while refusing to take 'no' for an answer.
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Re: Dealerships Are An Indispensable Part of Process
Why do people struggle so with detecting the most obvious sarcasm?
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Re: Re: Dealerships
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Re: Re: Dealerships Are An Indispensable Part of Process
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Re: Dealerships Are An Indispensable Part of Process
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Re: Dealerships Are An Indispensable Part of Process
If the consumer is too stupid to realize that their car is electric, then that's their fault. I don't see why that would be so earth-shattering to them, just plug it in to an external outlet.
I see OOTB has made a new account...
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electric car documentary
Although I got it from another source, it's on YouTube.
http://www.youtube.com/watch?v=bTHsTCBxDM8
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Re: electric car documentary
Don't believe everything you see. Los Angeles got rid of the public transit system because unlike NYC and Boston who are supplied with an endless rivers of money to build tunnels and train tracks everywhere, it doesn't have this endless funding stream. It has to support both it's own and part of Mexico's population, and realized that Buses were a much more cost effective solution. If you don't believe me, there is a lot of material and studies on it by the CATO institute and Reason magazine.
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Re: Re: electric car documentary
Many other cities had public rail or street cars that were bought out or pushed out by oil and car companies.
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Re: Re: electric car documentary
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