State Governments are Planning to Kill Tesla Motors Innovation in Michigan

Discussion in 'The Guru's Pub' started by sounar, Nov 22, 2014.

  1. sounar

    sounar Guest

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  2. IcE

    IcE Don Snow

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    The funny thing about this issue is that there's two sides to the coin. Both sides say consumer rights/choice are being reduced. But let's consider what it means to have a direct distribution platform for your car company:

    1). Consumer can get exactly what they want options wise with no hassle right from the factory (this is possible already with the dealership middleman)
    2). You, as the manufacturer, have direct control of sales and pricing. Instead of the suggested MSRP of old, now it's your price or no sale.

    And number 2 is the big problem here. While everyone hates "stealerships" because they're an annoying middleman (how many people have been outraged at having to pay a "doc fee"?), they actually provide a few key benefits. Because they're a buffer between you and the company that makes your car, they can usually sell you the car for a considerable amount under "suggested" retail. So they technically save you money. Who's to say that if Ford, GM, and everyone else set up a direct distrubtion to follow Tesla that prices would decrease? I'd argue that they actually would increase because what are you going to do? Go to another distribution center? Ha Ha.

    There's some psychology behind the "haggling" experience too. A lot of people prefer having the option to haggle, whether they realize it or not.

    This is why there's so much pressure to legislators to ban the ability for Tesla to do what they're doing. If they gain traction now with a dealership-less system, then the big three and everyone else are automatically behind profits wise if/when Tesla goes big with a super popular model. Not to mention the huge uproar that would result from dealerships across the country being instantly closed, thousands of employees laid off, etc. I'd honestly rather keep a dealership system just because I, as a consumer, like having that little bit of leverage when it comes to shopping for something I literally can't do without (at least in America).
     
    Last edited: Nov 22, 2014
  3. cowie

    cowie Ancient Guru

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    You know how it is the big 3 are scared and money goes along way with politicians . Telsa could not waste too much in lawyers the big 3 has bigger pockets(all of us) and more mobsters on the payroll

    Anyway those teslas are pretty cool all you hear is tires and air whooshing they have a service place not far from here I did some work at, those guys are all right.
    I cant understand that the battery tech is not really getting implemented plus the fact the stock is sky high and they sell like not that many cars.
    they gave up the patents to save on r&d and I hope the other battery companies can get something going with them
     
    Last edited: Nov 22, 2014
  4. (.)(.)

    (.)(.) Banned

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    Title is misleading but anyway..

    Id rather deal with a local dealership than have to try and deal with a country wide manufacturer if something went wrong wit ha vehicle. You're more likely to get timely service from your local than the time it would take when having to wait in line for service in the massive line at the manufactures.
     

  5. IcE

    IcE Don Snow

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    They're actually eagerly anticipating Tesla's success so they can do it themselves. This isn't the first company to try this. Ford and GM last tried in the 90's. But of course the backlash is just too much from their established network. Tesla is an upstart company so they don't have to worry about that.
     
  6. EspHack

    EspHack Ancient Guru

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    they are doomed anyway, this is the iPhone of the car industry, its time to adapt or die slowly, and their current user base is going to cry every time they try to catch up to tesla's way of doing things, while tesla supporters make a party for every bold move and a riot for every damage control the established guys do, so they are going to die slowly anyway
     
  7. sykozis

    sykozis Ancient Guru

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    There's really no concern for the "big 3" knocking off dealerships and taking over distribution. None of them can actually afford it.

    Under the current structure, the manufacturers actually profit from dealerships. The manufacturers sell the cars to the dealerships, who are then tasked with trying to sell every car they buy, to consumers. There's almost no risk at all for the manufacturers because the dealers have to buy the cars from them. Almost all of the risk is placed on the dealerships. Why would the manufacturers want to assume unnecessary risk?

    Tesla Motors is a small, niche company. It makes sense for them to sell "direct to consumer" as opposed to through a dealership structure. They sell fewer vehicles per year, than Ford sells of any 1 model. Going with a dealership structure would be detrimental to Tesla Motors at their current market share. In the future, if they ever see sales at the sale levels as Ford, Toyota, Honda, GM, Nissan and the other major manufacturers, it would make sense for them to shift towards a dealership structure.
     
  8. IcE

    IcE Don Snow

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    There's always going to be a risk of overproduction at some point, especially with the economy as unpredictable as it is these days. Sure, dealerships are stuck with the inventory they have, but I'm pretty sure if people aren't buying, the manufacturer is going to get the stiff, since why would you order more inventory if you can't sell what you already have?

    I get what you're saying, but bad sales are bad sales, and it's going to hurt the manufacturer the same regardless of whether or not they have someone to eat the cost initially. I still think that all companies would absolutely love to cut the dealer out of the equation so that they can sell for "retail".
     
  9. Clouseau

    Clouseau Ancient Guru

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    Nothing new. Just look around and see how many Tuckers there are. Watch the movie or read up on the Tucker. What was done to him is being done to Tesla. If Tesla was not being perceived as a threat then none of this would be happening.
     
  10. nhlkoho

    nhlkoho Guest

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    It's not the big 3 that have a problem with this, its the dealerships that are complaining. If Tesla is allowed to do this, then what's stopping Ford, and GM from doing the same thing? It would put all the dealerships out of business if we could just buy directly from the factory.
     

  11. BigBlockTowncar

    BigBlockTowncar Ancient Guru

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    The government regulates and a lobby is born. There is no electric car lobby; there soon will be.
     
  12. cowie

    cowie Ancient Guru

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    If you don't think that the big 3 funds this legislation then we are not on the same page.
    The dealers cry to corporate and this is how the 3 respond to keep a step back so there is no tucker references
    so don't overlook that ;)


    *I guess they are still the middle man
     
    Last edited: Nov 25, 2014
  13. IcE

    IcE Don Snow

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    Why would they be funding this legislation? As I said, Ford and GM have tried this before. They obviously want a factory direct setup, but red tape has them shut in on the matter.
     

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