The Texas legislature meets for 140 days every odd year. The bill was not passed in this session (which is to say it failed). It will likely be reintroduced in 2015 when the Texas Legislature meets again.
Title is misleading. Texas didn't ban the sale of Teslas but rather Teslas are incapable of being sold due to legislation that was added back in 2003. Still a problem, but it should at least be presented correctly.
Sorry, that's my bad. I read it elsewhere[1], went to Tesla's site for official news, and couldn't find anything other than Advocacy. I'll try to change it. I put up the original title in the spirit of the guidelines, because "Advocacy: Texas" doesn't by itself mean anything in particular. And I haven't seen this story on Hacker News.
You can buy a Tesla in Texas. You have to order it online and (as the page says) it will be delivered by a 3rd party. You can see plenty of them in Austin. Tesla also maintains two "showrooms", one in Austin and one in Houston where you can see the car, but cannot test drive it or discuss pricing.
Tesla is not allowed to run its own dealerships in Texas, because the auto dealer's union has laws which prevent car manufacturers from running their own dealerships.
"Prior to the filing deadline, Tesla Motors reached out to Sen. Craig Estes (R-Wichita Falls) and Rep. Eddie Rodriguez (D-Austin) who agreed to file bills on our behalf. These bills would permit U.S.-based manufacturers of 100% electric- or battery-powered vehicles to sell directly to Texas consumers."
Is "since the 70's" some sort of ironic joke? US industries were extremely and overtly anti-competitive up until the deregulation of the 1970's. If competition is restricted now, it was far worse in the past.
>or Uber/Lyft/etc having to go through extortionary-like procedures in California?
Forgive me for not knowing all the details, but what is the extortion in the fact that Taxi co's have to pay fees that Uber and Lyft don't? I'm guessing there is more to this than I know.
Extortion is perhaps not the most accurate word, going strictly by its definition. Anyway, the objection isn't to taxation of taxis, but rather to outright excluding new entrants to the taxi market. Which many cities do, via the medallion system.
I must admit, I don't see how it's extortion. It's capitalism at it's finest (by forcing the consideration of externalities as a free-market commodity). Since space in the streets is a fixed size-resource, supply and demand work to price medallions accordingly. If anything, the city sells medallions (referring to NYC) at a rate much lower than their actual value on the free market.
by definition, the city selling a fixed quantity of medallions is NOT capitalism at its finest. enabling an infinite number of providers to charge any price for any service they want, then letting those with the best offering win, is capitalism at its finest. the moment the government gets involved in limiting distribution you veer away from open markets/capitalism.
not that i'm a huge fan of unfettered capitalism, but just clarifying...
Putting an absolute cap on supply, which is what medallion programs do, is not a free market solution.
If you feel that use of the streets is not being rationed efficiently, or that heavy users of the streets are not paying enough relative to light users, then you can impose some kind of sliding scale or conditional tax on street use. This is not at all the same as an absolute cap on supply.
i don't really agree. other than some deregulation (power, cable, etc), for the most part i'd say the government today is more intertwined with lobbyists/big corporations' interests at heart than they used to be...
I'm really tired of people trying to set an equivalence between free markets and lack of regulation. I don't know if that's exactly what you're trying to do but:
A free market is a very specific definition, there are things like atomicity of actors and whatnot. Loads of regulations can help meet that, for example:
-Governments handing out tax credits to new companies helps free markets
-Governments setting in anti-trust laws helps free markets
Some regulation can be good. Airbnb, Lyft and to a lesser degree Uber (definitely UberX) are all competing with established industries that are heavily regulated for a reason.
Hotels and taxis are regulated to protect consumers (think safety).
Requiring car manufacturers to sell via franchised dealers protects franchised dealers.
Not that I know of. Uber, I think, has done a good job of running a good, self-regulated, business in leu of government regulation. I'm less worried about Uber specifically than the non-medallion transportation sector in general.
Taxis are regulated because you could have issues when someone gets into a random person's car. You can imagine how that would be dangerous for consumers (both physically and financially).
I personally like Uber a lot and had a good experience when I was able to use them. But, you could see how a lesser competitor could cut corners in background checking their drivers.
I'd rather have somethings explicitly regulated than trust that all companies are interested in spending money on things like background checks. AirBnB has the same flaws, but even more pronounced.
No. Some time ago the United States was a world leader in terms of the standard of living for the average citizen. Now it's dead last among developed countries, and by many measures, it's solidly among developing countries.
I, personally, think that fall from grace began around the 70's (ish) when the "We're the greatest" mentality put a stop to innovation.
Basically, the United States has remained where it was all those years ago, while other Developed countries have shot ahead.
The US is at or very near the worst among OECD countries, and often comparable to developing countires in: infant mortality, child poverty, child health and safety, life expectancy at birth, healthy life expectancy, rate of obesity, disability-adjusted life years, doctors per 1000 people, deaths from treatable conditions, rate of mental health disorders, rate of drug abuse, rate of prescription drug use, incarceration rate, rate of assaults, rate of homicides, rate of firearm deaths, rate of accidental firearm deaths and injuries, income inequality, wealth inequality, and economic mobility.
Someone in California should figure this out - I checked quick on CA's DMV website but couldn't find an email to ask someone.
If you buy a car in another state, California will charge you the difference in sales tax to bring it up to California's tax rate, netting them more tax revenue. What happens if you bring in a car that you paid a higher tax rate on? Would they refund you the difference? Would you get double taxed purchasing a vehicle from California and bringing it to Texas?
Can someone explain what's going on in the service paragraph? The customer can't talk to the repair place? They can't discuss the issues the car has, they need to relay all the information through Tesla motors? What the heck?
I am far from a tax expert, but my impression was that excess sales tax paid in another state can be claimed on your California state income tax return?
It sounds like the customer can talk to the repair place, it's just that the repair place can't contact the customer, or even advertise themselves as a Tesla repair place.
So, this might seem a silly question (I find the ban ludicrous but this is worth asking).
Why not just allow certain dealers, approved by Musk himself for all that matters, to become 'authorized Tesla dealers'? Why does Tesla insist on direct-to-consumer sales, even to the point of not being able to do so in large marketplaces?
Musk clearly wants Tesla to sell all of their products themselves ala Apple. His stated reason was that car dealer's cannot properly advertise the benefits of electric cars without undermining their gasoline car business and so he doesn't trust them to properly sell the car.
As a Prius owner I can attest to this, even if just a little. The dealerships I talked to over the past 4 years were excited to sell me a Prius when I called over the phone (and when demand was so high they had to order them and you agreed to MSRP to place said order).
However, showing up on the lot, they generally didn't have one to show you (again, the demand issue) and would push me towards an in stock Camry or similar.
Even when I made it explicitly clear I wanted a Prius there was a bunch of FUD acted out by the sales reps. "Yea, the sticker says 45mpg, but that's only in the city where you can use the battery". "Hey Jon, what'd that lady say she got on her commut? 37mpg?" I was truly shocked. I will also note that this happened more at multi-franchise dealerships.
That does not explain away others who would relish the idea of setting up an electric only dealership. He is using an pretty damn thin excuse to not allow others to sell the cars. Sorry, but there are many other like minded individuals who would very much sell the cars the way he wants, they may even improve on the methods.
Local dealers for electrics would provide the benefit of tighter integration with supporting businesses, from those who install the requisite plugs at homes, to marketing the need of stations to employers so that their employees can charge up at work. There are many many benefits to having local, private dealers.
> There are many many benefits to having local, private dealers.
Oh, so is that why they are mandatory through legislation? Usually if something has "many many benefits", the behavior will spontaneously arise and not need to be government mandated
Local dealers don't help the consumer, they just make buying a car feel awful and add unnecessary middlemen making the car more expensive to the consumer. Consumers should be able to order direct from the factory without all the unnecessary useless and sleazy middleman who do nothing of value and still expect to profit.
The fact that standard practice at nearly all car dealerships is the old good cop bad cop routine between the salesman and the floor manager should tell you you're always being hustled. Whether you can win or not is irrelevant, you lost by being forced to play to begin with.
Probably similar to the reasons Apple introduced the Apple Stores. As explained in the article, Tesla feel that typical dealerships aren't set up or motivated to do the education necessary to sell all-electric cars, so they want to do that themselves.
Also, a large consideration in buying an unusual new type of car is service and support. If I was buying a dealership's #3 brand, I'd expect that in a few years they'd drop that brand, and I'd have to look elsewhere for warranty service (this has happened to me twice now with Subarus, for example). Tesla's addressed this by setting up a separate Texas-only subsidiary to handle service, but apparently they can't legally do the same for sales.
In addition to the "Apple business model," the Model S is an extraordinarily expensive car which is also quite a bit different from basically every other car on the market. As a hypothetical consumer, if I were to make such a monumental purchase for just a car, a car which is moreover out of the mainstream in terms of its basic method of operation, I'd want the absolute best service and support humanly possible for it, and I wouldn't expect to get that from a third-party dealer generally.
Elon, just install a bunch[1] of superchargers on I-10.
[1] And I do mean a bunch.
EDIT: I just noticed. This is an old press release. The lege' is out of session. Be sure and pester representatives if another special session is called.
don't think it's about being against the electric car, but against a world where car dealerships are unnecessary. car dealerships will eventually go the way of the book store. they don't want a world in which they aren't the very profitable middle men between the consumer and the manufacturer. tesla's direct consumer sales threatens their existence, so they want nothing to do with it.
The dealerships in Texas don't really care about Tesla, they're just afraid that other car manufacturers will follow suit and undercut their business model.
Btw, "Financier" is a fascinating read and should be just used a main textbook for "Civics" class in schools on how the system works. I like this double-whammy :
"...
Grund had been about, years before, purchasing through one or two brokers large amounts of the various kinds of Texas debt certificates and bonds. The Republic of Texas, in its struggle for independence from Mexico, had issued bonds and certificates in great variety, amounting in value to ten or fifteen million dollars. Later, in connection with the scheme to make Texas a State of the Union, a bill was passed providing a contribution on the part of the United States of five million dollars, to be applied to the extinguishment of this old debt. Grund knew of this, and also of the fact that some of this debt, owing to the peculiar conditions of issue, was to be paid in full, while other portions were to be scaled down, and there was to be a false or pre-arranged failure to pass the bill at one session in order to frighten off the outsiders who might have heard and begun to buy the old certificates for profit.
..."
Is it correct to assume a Texas resident may order one from another dealer and drive it home? Can they just drive it home and legally have it registered in Texas?
Yeah, you basically just order it online and there's no problem. There are a couple of showrooms in Austin and from what I've heard, although you can't actually purchase it from the Tesla showroom, you are welcome to use their kiosks to order one via the internet.
There's gotta be a simple, legal workaround to require franchising. Here's how I could see it happening:
1. Create Company X.
2. Sell exclusive USA franchising rights to Company X.
3. Acquire Company X, rename the new subsidiary as 'Tesla Franchising'.
4. ???
5. Profit
Edit: Thanks for the unwarranted down vote without a comment... I didn't know that big oil is trolling HN now.
From the article, they're already doing this with their service departments:
Customers in need of warranty service must call the Tesla Service to speak to someone at Tesla Motors in California. Based on their over-the-phone explanation, a Tesla Service employee determines whether repair work is needed/warranted. If so, the customer is sent to have the work sub-contracted by a local subsidiary, Tesla Motors TX. The local repair centers – currently in Austin and Houston – cannot advertise that they do warranty repairs nor can they discuss any additional repair needs or concerns with the customer. Tesla Motors TX then bills Texas Motors, Inc. for the work. If customers have additional warranty concerns, Tesla Motors TX cannot discuss them with the customer – the customer would need to call Tesla Motors, Inc. back and go through the process again.
82 comments
[ 5.5 ms ] story [ 178 ms ] threadTitle is misleading. Texas didn't ban the sale of Teslas but rather Teslas are incapable of being sold due to legislation that was added back in 2003. Still a problem, but it should at least be presented correctly.
[1]: http://news.yahoo.com/blogs/nightline-fix-abc-news/why-texas...
Tesla is not allowed to run its own dealerships in Texas, because the auto dealer's union has laws which prevent car manufacturers from running their own dealerships.
I've never heard of lobbying arms being referred to as "unions"
Although a union is for all intents and purpose a lobbying arm...
We bought ours through the website. It is the ONLY way to buy one regardless of where you live.
A silly band-aid to ridiculous legislation.
http://www.texastribune.org/2013/04/23/teslas-efforts-texas-...
When a competitor offers a better product that you, make what they are doing illegal rather than competing with them.
Stopping innovation in America since the 70s.
https://en.wikipedia.org/wiki/Staggers_Rail_Act
https://en.wikipedia.org/wiki/Motor_Carrier_Act_of_1980
https://en.wikipedia.org/wiki/Airline_Deregulation_Act
or Uber/Lyft/etc having to go through extortionary-like procedures in California?
...
Forgive me for not knowing all the details, but what is the extortion in the fact that Taxi co's have to pay fees that Uber and Lyft don't? I'm guessing there is more to this than I know.
not that i'm a huge fan of unfettered capitalism, but just clarifying...
If you feel that use of the streets is not being rationed efficiently, or that heavy users of the streets are not paying enough relative to light users, then you can impose some kind of sliding scale or conditional tax on street use. This is not at all the same as an absolute cap on supply.
A free market is a very specific definition, there are things like atomicity of actors and whatnot. Loads of regulations can help meet that, for example:
-Governments handing out tax credits to new companies helps free markets
-Governments setting in anti-trust laws helps free markets
-Governments setting disclosure regulations helps free markets
Some regulations harm free markets (namely things like entry controls), but others protect it. We need to learn to make the distinction
Hotels and taxis are regulated to protect consumers (think safety).
Requiring car manufacturers to sell via franchised dealers protects franchised dealers.
That's a big difference.
Taxis are regulated because you could have issues when someone gets into a random person's car. You can imagine how that would be dangerous for consumers (both physically and financially).
I personally like Uber a lot and had a good experience when I was able to use them. But, you could see how a lesser competitor could cut corners in background checking their drivers.
I'd rather have somethings explicitly regulated than trust that all companies are interested in spending money on things like background checks. AirBnB has the same flaws, but even more pronounced.
No. Some time ago the United States was a world leader in terms of the standard of living for the average citizen. Now it's dead last among developed countries, and by many measures, it's solidly among developing countries.
I, personally, think that fall from grace began around the 70's (ish) when the "We're the greatest" mentality put a stop to innovation.
Basically, the United States has remained where it was all those years ago, while other Developed countries have shot ahead.
You mean the mentality that motivated deregulation?
See for yourself: http://www.oecd.org/statistics/
Tesla does not have these problems in other states such as California.
If you buy a car in another state, California will charge you the difference in sales tax to bring it up to California's tax rate, netting them more tax revenue. What happens if you bring in a car that you paid a higher tax rate on? Would they refund you the difference? Would you get double taxed purchasing a vehicle from California and bringing it to Texas?
Can someone explain what's going on in the service paragraph? The customer can't talk to the repair place? They can't discuss the issues the car has, they need to relay all the information through Tesla motors? What the heck?
It sounds like the customer can talk to the repair place, it's just that the repair place can't contact the customer, or even advertise themselves as a Tesla repair place.
In fact, last I looked used Model S cars were going for more than retail. Scarcity, I guess.
But it's not like you can't get a Tesla in Texas, just that they can't sell it to you.
Why not just allow certain dealers, approved by Musk himself for all that matters, to become 'authorized Tesla dealers'? Why does Tesla insist on direct-to-consumer sales, even to the point of not being able to do so in large marketplaces?
However, showing up on the lot, they generally didn't have one to show you (again, the demand issue) and would push me towards an in stock Camry or similar.
Even when I made it explicitly clear I wanted a Prius there was a bunch of FUD acted out by the sales reps. "Yea, the sticker says 45mpg, but that's only in the city where you can use the battery". "Hey Jon, what'd that lady say she got on her commut? 37mpg?" I was truly shocked. I will also note that this happened more at multi-franchise dealerships.
Local dealers for electrics would provide the benefit of tighter integration with supporting businesses, from those who install the requisite plugs at homes, to marketing the need of stations to employers so that their employees can charge up at work. There are many many benefits to having local, private dealers.
Oh, so is that why they are mandatory through legislation? Usually if something has "many many benefits", the behavior will spontaneously arise and not need to be government mandated
Seems like rent-seeking via political clout to me...
The fact that standard practice at nearly all car dealerships is the old good cop bad cop routine between the salesman and the floor manager should tell you you're always being hustled. Whether you can win or not is irrelevant, you lost by being forced to play to begin with.
Also, a large consideration in buying an unusual new type of car is service and support. If I was buying a dealership's #3 brand, I'd expect that in a few years they'd drop that brand, and I'd have to look elsewhere for warranty service (this has happened to me twice now with Subarus, for example). Tesla's addressed this by setting up a separate Texas-only subsidiary to handle service, but apparently they can't legally do the same for sales.
That's why so many horrible dealerships are allowed to continue operating.
[1] And I do mean a bunch.
EDIT: I just noticed. This is an old press release. The lege' is out of session. Be sure and pester representatives if another special session is called.
a: His lips are moving.
Btw, "Financier" is a fascinating read and should be just used a main textbook for "Civics" class in schools on how the system works. I like this double-whammy :
"... Grund had been about, years before, purchasing through one or two brokers large amounts of the various kinds of Texas debt certificates and bonds. The Republic of Texas, in its struggle for independence from Mexico, had issued bonds and certificates in great variety, amounting in value to ten or fifteen million dollars. Later, in connection with the scheme to make Texas a State of the Union, a bill was passed providing a contribution on the part of the United States of five million dollars, to be applied to the extinguishment of this old debt. Grund knew of this, and also of the fact that some of this debt, owing to the peculiar conditions of issue, was to be paid in full, while other portions were to be scaled down, and there was to be a false or pre-arranged failure to pass the bill at one session in order to frighten off the outsiders who might have heard and begun to buy the old certificates for profit. ..."
BTW this is old, the referenced bills did not pass.
1 - A charismatic "Rocket scientist" as a founder (Arguably the most inspiring founder since Steve Jobs). Check!
2 - A disruptive idea in a industry that hasn't been disrupted since the rise of Japanese cars (A long long time ago). Check!
3 - Wining against all odds (a year ago very few people were betting on Tesla). Check!
4 - A world changing idea. Check!
5 - A David and Goliath story. Check!
6 - A sexy machine and a delightful product. Check!
1. Create Company X.
2. Sell exclusive USA franchising rights to Company X.
3. Acquire Company X, rename the new subsidiary as 'Tesla Franchising'.
4. ???
5. Profit
Edit: Thanks for the unwarranted down vote without a comment... I didn't know that big oil is trolling HN now.
From the article, they're already doing this with their service departments:
Customers in need of warranty service must call the Tesla Service to speak to someone at Tesla Motors in California. Based on their over-the-phone explanation, a Tesla Service employee determines whether repair work is needed/warranted. If so, the customer is sent to have the work sub-contracted by a local subsidiary, Tesla Motors TX. The local repair centers – currently in Austin and Houston – cannot advertise that they do warranty repairs nor can they discuss any additional repair needs or concerns with the customer. Tesla Motors TX then bills Texas Motors, Inc. for the work. If customers have additional warranty concerns, Tesla Motors TX cannot discuss them with the customer – the customer would need to call Tesla Motors, Inc. back and go through the process again.