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Elon Musk: To the People of New Jersey

• zipop 13y ago
  I'm not opposed to what Musk is trying to do but how or why are auto dealers a monopoly? Those direct sales laws were originally created to preserve small business.
  • silverlight 13y ago
    I thought he did a good job explaining why those laws were put in place and why they're not needed to be applied here. Even if you don't agree it's a monopoly, clearly in this case the law is not being applied as it should be.
    • notahacker 13y ago
      I was impressed by the fact that he bothered to offer an explanation of why the law was introduced and what purpose it served; it makes for a more compelling argument than some cookie-cutter rant about Big Evil Corporations wrapping their rent-seeking tentacles around the government.
      • rhizome 13y ago
        Cookie-cutter rants are rarely published by people with skin in the game.
        • stcredzero 13y ago
          I suspect it's the same general mechanism as even the most liberal of recent US presidents strangely doing the bidding of the military-industrial complex. (Obama and Carter.)
    • npizzolato 13y ago
      Don't forget that Musk is completely biased here, and his representation of the history of those laws are likely to be tainted by that bias. I don't know the full history of why these laws were put into place, but I wouldn't trust Musk to tell me the full story when he's clearly trying to paint a very specific picture.
  • Sniperfish 13y ago
    Oligopoly more than monopoly. But if there is a single dealer lobby group then it's a collusive oligopoly (cartel) which will be able to wield monopolistic power.
  • digikata 13y ago
    This Planet Money episode[1] gives a interesting of the history of autodealers, with some additional info regarding the latest twists that had come up due the fiscal crisis too. [1] http://www.npr.org/blogs/money/2013/02/12/171814201/episode-435-why-buying-a-car-is-so-awful http://www.npr.org/blogs/money/2013/02/12/171814201/episode-...
    • kyrra 13y ago
      That's a fairly one-sided view on the situation. Just some random points: * Saturn tried the "no-haggle" new car buying experience. People generally liked this, though Saturn doesn't exist anymore. * "closing a dealer is hard". Dealers have to pay for the land they own. The cars on their lot tend to be bought with money from the bank (a bank really owns the cars). The dealers just have to pay insurance/interest on the cars. The longer a car is on the lot, the more insurance and interest the dealer has to pay. If a dealer isn't selling cars to pay the bills, they will shutdown. * Dealership "look". My knowledge is only from Texas.... Some brands, like Lexus and Cadillac set some very strict looks for the dealership. Specific signage, layout, etc... A manufacturer can set standards the dealer must live up to. Also, if a dealership ranks below a certain score on their customer surveys, the manufacturer can close them down. * Pricing... yes, a middle man increases the cost of something. But that middle man can help explain features, is there to help deal with problems, and as they tend to be more locally rooted than an auto-maker, will try (hopefully) try harder to please their customers. Why do we have to pay real-estate agents so much? Good agents really help a buyer, same could (hopefully) be said for a car sales person. * (edit addition) Why are sales people jerks? This will heavily depend on the dealership you are dealing with. Management of a dealership does a lot to shape the experience for their customers. A few things: sales people are paid a % of the money they hold over the cost of the car, so they are financially incentivized to keep the car price high. A car that has been on a lot for a long time has incentives added to it for a sales person. Sales people get bonuses based on number of cars sold. Sales people sometimes get bonuses based on their customer surveys (or are required to keep a certain average or be fired). Dealers are allocated new shipments of cars based on past sales, so a lot of dealers want to sell as many cars as possible (if they are trying to grow); dealers that don't care about growing will be less flexible about pricing. Though, I agree that the car buying experience should adapt as information about cars is more easily accessible, it would require all of the states redoing the state auto franchise laws.
  • pbreit 13y ago
    The monopoly is that only dealers are allowed to sell cars. Whatever the original intent, they seem not only unnecessary but quite anti-American (most definitions) now.
  • 300bps 13y ago
    My first reaction upon reading your comment was that there was no way you read the article before commenting. Basically, what you say is directly and effectively addressed in the article. I was going to give you the benefit of the doubt though until I saw that the article was posted 23 minutes ago. Your comment was posted 21 minutes ago.
  • cylinder 13y ago
    Most dealerships would not count as "small" businesses. They are at the very least "medium enterprise" and at the most Fortune 500 companies[1]. http://en.wikipedia.org/wiki/Group_1_Automotive http://en.wikipedia.org/wiki/Group_1_Automotive
    • runako 13y ago
      Excellent link! Some quick stats on the size of this particular "small" auto dealer company: Trailing 12-month revenue: $8.9B Trailing 12-month gross profit: $1.29B CEO Pay: $2.5mm (for comparison, this is higher than the cash comp of the CEOs of GM and Microsoft) I'm not sure this business needs regulatory protection from the likes of Tesla.
    • Consultant32452 13y ago
      Well, most dealerships are probably used car dealerships that almost certainly qualify as small businesses. Of course, that has little to do with our current conversation. I'm just feeling extra pedantic today.
• easymovet 13y ago
  Very saddened by the blatant corruption in our government. Where do I vote for a new government based on ethics and accountability (apart from New Zealand).
  • mturmon 13y ago
    Government does not respond to a passive arrangement where you "vote for ethics" every so often. You have to participate more actively. This involves work.
    • easymovet 13y ago
      Lets keep the discussion positive. Understand I'm not a political science major or a fancy debater, I don't claim to poses more than average intellegence, I'm just asking a question, hoping someone with more knowledge on the matter has an answer. After working to provide for the family I don't have a lot of free time to commit to politics if that's what you mean by 'participate more actively', is that the only course of action?
      • npizzolato 13y ago
        Do you contact your congressman, local government, or other representative body about how you want them to vote on any particular law? They're a phone call away.
        • easymovet 13y ago
          That's a good idea. I've written a few letters before, but never felt like I had the skill set to argue about these points on the phone, I'm also an introvert so cold calling is not something that I choose to do very often.
          • DavidAdams 13y ago
            Fortunately/unfortunately, there's no arguing on the phone involved. What happens is a junior staffer answers the phone and keeps a tally of which constituents come in on either side of an issue. Of course, if you're willing to make an extra effort, you can make an appointment to visit the congressperson's office, though unless you're a donor, you're unlikely to have much success meeting with the congressperson in person, but your voice would probably be heard louder nonetheless.
• smacktoward 13y ago
  > The evidence is clear: when has an American startup auto company ever succeeded by selling through auto dealers? The last successful American car company was Chrysler, which was founded almost a century ago, and even they went bankrupt a few years ago, along with General Motors. Since the founding of Chrysler, there have been dozens of failures, Tucker and DeLorean being simply the most well-known. In recent years, electric car startups, such as Fisker, Coda, and many others, attempted to use auto dealers and all failed. This part works better as an argument for "don't start a car company" than anything else. I mean, yes, Tucker and DeLorean and Fisker et al used dealers, and they all failed, but that doesn't mean that they failed because they used dealers. The people who worked for them all consumed oxygen, too; it doesn't follow that we'd all be driving DeLoreans today if only we lived in an artificial vacuum. I appreciate where he's coming from, and I think he should be allowed to sell his cars directly to anyone who wants to buy one that way, but shoddy "correlation equals causation" arguments don't help his case.
  • oddevan 13y ago
    You make a valid point. In Musk's defense, I can't think of any car manufacturers that have used direct sales on this scale, so while the correlation does not prove causation here, it doesn't disprove it either. He seems to simply be stating that this aspect of their business model (direct sales) is a key part of Tesla's business and one that he believes is essential to its survival.
    • gutnor 13y ago
      Just wondering though, what is preventing them to sell a franchise of Tesla and just provide the seller the appropriate incentive - like keep a fraction of the sales. I suppose they still have the right to put some restriction to the franchisee like they do in the food industry ( like you will not see a McDonald selling KFC )
      • thenonsequitur 12y ago
        What's preventing them? If they did that, they'd have to give up a fraction of their sales. Also, it's not easy to set or agree on a commission percent when Tesla and the dealerships have such opposing interests to begin with. In other words, they are not trying this simply because selling direct is a better choice.
• caycep 13y ago
  Throwing it down publicly to Chris Christie - now that is confidence!
  • smacktoward 13y ago
    Given how low Chris Christie's political stock is at the moment, I'm not sure much confidence is required.
  • 300bps 13y ago
    Chris Christie all but had the Republican presidential nomination sewn up before the bridge closure scandal. Between that and this nonsense, his reputation as a "non-politician" has been tremendously tarnished.
    • protomyth 13y ago
      Chris Christie wouldn't have made it through the primaries. His polling numbers among the people who vote in primaries were not that good.
      • MartinCron 13y ago
        Yeah, he was always a leading favorite Republican candidate among non-Republicans. Primary voters? No way.
        • stcredzero 13y ago
          Aw, hell, if Chris Christie is "Republican Lite," what chance in hell is there for a non-sociopath Republican candidate?
          • MartinCron 13y ago
            To be fair, most of the "hardcore" conservatives are not sociopaths, they are just shallow ideologues :) A true sociopath would appear to be a pragmatist, as that's the most practical approach.
• mrt0mat0 13y ago
  It blows my mind that in a country that preaches a free-market economy, the government is preventing a company from selling a superior product. I'm pretty sure people will still buy the car if they want to, and in time, those car companies will go under anyway, but why slow down progress?
  • ethikal 13y ago
    Because existing businesses are afraid of change and politicians are afraid of possibly eliminating jobs. People are afraid of change because it means that they will have to adapt.
  • ChuckMcM 13y ago
    "If you build a better mousetrap, the world will beat a path to your door, unless its run by mice." --me
    • baddox 13y ago
      I think it would be better to say "unless it's run by the current mousetrap manufacturers."
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      • deleted 13y ago
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  • cylinder 13y ago
    Remember that the US is not pro-business, it's corporatist. It's a government that is able to be easily captured by incumbent, monied interests. Starting businesses and operating them on a small level is much easier in other developed nations.
    • bfe 13y ago
      Acting in favor of individual businesses is usually orthogonal or antithetical to acting in favor of the free market. Big businesses and the politicians who love them often rely heavily on erasing the perception of that difference.
• skore 13y ago
  > An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car. Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no visit to the service center is required for that either. Gotta hand it to Musk - that's some smooth salestalk in what is supposed to be just voicing a public opinion against shady politics. I was halfway through the third sentence when I caught myself thinking - "indeed, that does sound like such a better dea--- Hey wait a minute!". Musk, you sneaky bastard! Never missing a chance to remind me why I want a dang tesla. He is right and it's a terrific salespitch. That's the best kind of right.
  • smacktoward 13y ago
    It is a terrific salespitch, especially in how it raises the subject of OTA updates while adroitly waltzing you past the obvious worry that a poorly tested OTA update will brick your car.
    • peeters 13y ago
      How does the distribution mechanism in itself affect the quality? It's just a way of getting new software on the car. You can have the exact same standards of quality for an update installed over the air as one installed at a service centre.
      • smackfu 13y ago
        The easier it is to update software, the less important that it is bug-free.
        • npizzolato 13y ago
          Until that bug causes a car to drive unexpectedly into a wall in the interim time until you've sent out a patch. The importance of being bug-free is much more driven by the potential damage caused by a bug than how quickly you can update the software.
• rayiner 13y ago
  > The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! One of the things I love about Elon Musk, besides the fact that he has the balls to tackle hard, capital-intensive problems, is that he has a pragmatic, realist approach. Getting SpaceX NASA contracts was not something everyone would have done, not when many were marching to the drumbeat of "private space exploration is superior to public." And apparently, he's not being above throwing a recent scandal in Chris Christie's face. The whole article is a great play though. Note that he starts by explaining the rationale for the existing laws, validating their original purpose, then showing why that rationale doesn't apply to Tesla. This is wonderful persuasive writing.
• pbreit 13y ago
  In case you missed this last year, Tesla's vision for servicing and customer delight is refreshingly progressive: http://www.teslamotors.com/blog/creating-world%E2%80%99s-best-service-and-warranty-program-0 http://www.teslamotors.com/blog/creating-world%E2%80%99s-bes...
• nlh 13y ago
  His best line: > The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures 'consumer protection'. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of 'protection', this is obviously untrue. Nicely done, Elon. Nicely done.
  • xal 13y ago
    Could you explain the reference please?
    • dangoldin 13y ago
      There was a scandal in NJ where Chris Christie's underlings were caught closing a bridge when they didn't get political support from a mayor. http://www.motherjones.com/politics/2014/01/chris-christie-bridge-traffic-jam-emails http://www.motherjones.com/politics/2014/01/chris-christie-b...
    • acomjean 13y ago
      I used to work in NJ. Chris Christie's administration closed 3 lanes of the George Washington Bridge for a bogus "traffic study", making tons of Traffic. It was political payback against the city of Fort Lee who has a mayor who wouldn't endorse Christie when he was running for governor. Christie says he didn't know about it but some in his administration have left or been asked to leave over it.
    • mullingitover 13y ago
      Gov. Christie's office ordered the most heavily trafficked bridge in the country (if not the world) closed for political revenge. He is desperately trying to throw his staff under the bus to avoid accountability for this. It's a very delicate subject for him right now, and Musk bringing it up is cruel and yet at the same time (imho) totally fair play.
      • Jgrubb 13y ago
        Completely fair play. To me, Musk is just pointing out that Christie is a corrupt bully (who would absolutely play this exact same card if the situations were reversed).
• chris_mahan 13y ago
  That's some good writing by Elon, by the way. Perhaps it went through an editor or two, for typos and such, but I have to say I find his style engaging... (Disclaimer: If I had the money I'd buy a tesla, and I am an investor.)
  • untog 13y ago
    Perhaps it went through an editor or two I 110% percent guarantee it did. No CEO of a decent sized company would not.
    • minimax 13y ago
      Your comment reminded me of the Whole Foods guy -- a counterexample. http://www.nytimes.com/2007/07/12/business/12foods.html?_r=0 http://www.nytimes.com/2007/07/12/business/12foods.html?_r=0
• jusben1369 13y ago
  Musk is massively disingenuous and rather insulting to our intelligence. But he's a heck of a salesman and makes a wonderful car. Like many persuasive people he arrives at an answer and backs into rationale but makes it appear the other way around. I'll give you just one example. The law of the land in NJ is that you can't sell in NJ unless through a dealership. That's the current law. Those laws need to change to allow a direct to consumer sale. Map that to this quote "ended your right to purchase vehicles at a manufacturer store within the state." Brilliant. "You lost something you had" is so much more powerful than "We need to persuade the legislator to make a change to add something new" Seriously, I dig his cars. And his vision. And I suspect that to attack such large entrenched markets you have to have this kind of maniacal drive. I just hate being misled and manipulated - no matter who the person.
  • revelation 13y ago
    I think you missed the part where they instituted new rules effective starting in April, which is when the existing Tesla stores will be reduced to galleries. In your vigor, you seem to have misled only yourself.
    • jusben1369 13y ago
      See above or below.
    • greglindahl 13y ago
      Tesla stores are already galleries (with a small repair facility). Purchases are made over the Internet.
  • thedufer 13y ago
    They're currently selling Teslas in NJ (without a middleman) and not having any legal problems because of it, so your example's premise seems to be flawed.
    • jusben1369 13y ago
      You have to dig deeper on the story than his post. They've been told for a long time that the license shouldn't have been issued and would be revoked and that a change in legislation was needed. Again, Musk knows all this. But it doesn't fit the dialogue.
• sheetjs 13y ago
  > the auto dealer franchise laws were originally put in place for a just cause and are now being twisted to an unjust purpose ... and Christie can argue that allowing Tesla creates a slippery slope whereby Ford and GM and other companies end up crushing the franchisees that the law intended to protect. Musk is trying to find a middle ground that just doesn't exist unless you accept governments creating one-off laws that specifically recognizes individual corporations.
  • ska 13y ago
    Isn't that easily avoided though? Surely you could protect existing franchises or franchise regions without constraining a manufacturers ability to sell without franchise, or in regions where no franchisee exists.
  • thedufer 13y ago
    Its not clear that that's true. The law says "auto manufacturers can't sell cars" but it originally meant "auto manufacturers can't renege on franchise agreements (or otherwise abuse them)". Surely there's some way to codify the second one without resorting to the first?
    • sheetjs 13y ago
      The auto manufacturers can afford to eat into their normal profit margins and sell the cars at a much lower price (after deals) than the franchisees can, so it would be difficult to craft legislation that protects franchisees without allowing the manufacturers to massively undercut. The only real way to avoid abuse is to prevent auto manufacturers from selling in the first place
      • ghaff 13y ago
        I do have to point out that lots of companies in lots of industries (including most B2B technology firms) sell both direct and through partners. Every one of them has to deal with "channel conflict" but that's what you do. It's a balancing act. The partners are never 100% happy but they add value to the manufacturer (or they wouldn't be allowed to stay partners) and the manufacturer can't routinely screw them over (or they'll depart for greener pastures). I'm guessing a mixed model wouldn't really make sense with autos though.
• Edmond 13y ago
  I hope people don't forget the profit motive of Mr Musk. It seems technology entrepreneurs have adopted the rhetoric of "just trying to make the world a better place" while conveniently ignoring their own profit making motives. I am no friend of car dealers but I am also not going to be suckered by a self-serving sales pitch. While I don't necessarily support the NJ move, I think we should start asking questions about economic value flow. If people live in one place yet all their economic activity is directed to some place on the other side of the country, what is the long term effect of this on their local economy? I don't exclude myself, we all use these web services that are highly concentrated in SV, what is going to happen to our local economies?
  • jrs99 13y ago
    Well, if local businesses choose the services that save them a lot of money it'll probably make them more profitable and allow them to grow and hire more people.
  • toomuchtodo 13y ago
    > I don't exclude myself, we all use these web services that are highly concentrated in SV, what is going to happen to our local economies? They adapt, as all economies must to the changing winds.
    • Edmond 13y ago
      That is an optimistic take, the evidence so far with the move of manufacturing to low-wage countries suggests otherwise.
      • nazgulnarsil 13y ago
        Oh no! I might take a slight hit to my standard of living while the developing world massively increases theirs!
      • toomuchtodo 13y ago
        Isn't that what we preach here as automation puts half the US workforce out of business? Oh, what's that? I'm a Javascript engineer making $100K+/year? It doesn't last forever (i.e 98-01 tech boom, the sands move quickly underneath us). The future is going to be not only disruptive, but destructive, to industries and people alike. How we turn out as a society will be determined by the policies we develop around handling this turbulent time in human history.
• bfe 13y ago
  Just last week, Elon argued against a different legal monopoly, for national security launch services by the Boeing-Lockheed joint venture. [1] It's amazing how much building a new company in a supposedly free market requires arguing against politicians who claim to champion free market economics, but who actually use government to give cushy monopolies to incumbents with big lobbying budgets. "Crony capitalism" isn't an accurate term for this; it's more like economic central planning by way of lobbyists instead of communist bureaus. 1. http://www.spacex.com/press/2014/03/05/elon-musks-statement-us-senate-appropriations-subcommittee-defense http://www.spacex.com/press/2014/03/05/elon-musks-statement-... http://www.bloomberg.com/news/2014-03-05/musk-makes-washington-push-for-military-launch-market.html http://www.bloomberg.com/news/2014-03-05/musk-makes-washingt...
  • Jgrubb 13y ago
    Why isn't Crony Capitalism an accurate term for this? Seems like exactly the term to me.
    • bfe 13y ago
      Because it's all crony, no capitalism.
      • stcredzero 13y ago
        it's all crony, no capitalism crony capitalism == crony "capitalism" Americans are just lousy with punctuation.
        • deleted 13y ago
          [deleted]
      • dragonwriter 13y ago
        > Because it's all crony, no capitalism. Well, except that it demonstrates exactly the characteristics of the system in which the holders of capital hold society captive to their interests which led to its criticism by the people who coined the term "capitalism" for that system.
• dangoldin 13y ago
  So it seems you can still buy it online. Does that mean you can go into a dealership and just buy it on your phone?
  • ericd 13y ago
    Ha! Maybe they could set up QR codes to link to the pages that discuss the pricing, or just have signs all over that tell people to go to teslamotors.com on their smartphones, and to contact their legislature if they think this is a stupid rule.
  • paulgb 13y ago
    I wonder if they could get away with having iPads pre-loaded to teslamotors.com on-site.
  • dangrossman 13y ago
    AFAIK, everyone who's ever bought a Tesla car has bought it online. In the states Tesla is allowed to sell directly, the process of buying one in the store is being sat at a computer and being guided through your online order with a sales rep's help. They don't have cars on lots you can purchase and drive away. The stores are all basically showrooms whether they're allowed to sell cars there or not.
• rdtsc 13y ago
  Is it possible for Tesla to just create a shell "autodealer dealer" company in each state. I am guessing they thought of that and legal language prevents its from working.
  • mediaman 13y ago
    The dealer cannot be owned by the manufacturer.
    • koenigdavidmj 13y ago
      Shell company owning both the manufacturer and the dealers?
• larrys 13y ago
  "Moreover, it is much harder to sell a new technology car from a new company when people are so used to the old. Inevitably, they revert to selling what’s easy and it is game over for the new company." That's total BS. Any dealer who invests money in a new show room to sell a new brand of car (think of Mini which was picked up by many legacy BMW dealers and is sold in many mini only showrooms) is going to put in the effort to sell the product. We aren't talking about putting Teslas on the same floor as Mercedes. It would be trivial for Tesla to insist that the product be sold out of a dedicated facility which would cost a dealer money to construct. The idea that that dealer would simply push another product (or the salesman) in another showroom that he operates is ridiculous. And contrary to the behavior of existing multi line large dealerships.
• larrys 13y ago
  "An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car." Well then what about BMW with bumper to bumper service as only one example. That's a high end car that you don't pay for service for (iirc) 3 years. They cover everything. Wiper blades you name it. I think last I checked the same was true for Subaru and I think even Jeep Chrysler is doing this (may be wrong about that one). And that's not a conflict of interest but rather a business model. In the case of cars which do make money from service they therefore in theory have a lower price for the vehicle. This argument is like saying that you are a better airline because you don't charge for luggage. Presumably that extra revenue allows you to offer lower ticket prices. And surprise that is what happens. Back when airlines were regulated (and had less competition) and they charged way higher prices they didn't have to nickle and dime you to make a profit.
  • maxerickson 13y ago
    You don't see any difference between not needing some types of service and building some types of service into the price? Wiper blades are what, $30 a year if you really care about them?
  • ghaff 13y ago
    More to the point, the things he mentions are not very expensive service items--to say nothing of the fact that there's no particularly compelling reason to have them done at the dealer if you don't want to. (And talking about "tune-ups" is pretty close to an anachronism at this point.) Tesla, on the other hand, does have all its new electric car components which are all very impressive technically but about which relatively little is yet known about service life and long-term service costs. Really, this is about Musk wanting control over the complete experience. Nothing wrong with that (see, e.g., Apple). And I'm no particular fan of the auto dealer experience. (Though I don't buy luxury brands today which, I've been told, unsurprisingly offer a better dealer experience in general.) But you'll end up with dealers of some sort one way or the other.
    • 13y ago
• EGreg 13y ago
  Musk's sales around the country are probably going up thanks to this event, and his taking the opportunity to tout Teslas using facts :)
  • dangrossman 13y ago
    There probably aren't many people reading Tesla press releases other than (a) people that already own a Tesla car, and (b) people that don't need to be swayed, they just can't afford/justify the price of one.
• flyinglizard 13y ago
  Look beyond this local issue, and you'll see how we're in the middle of a huge power shift. It used to be that businessmen like Musk had to lobby, pressure and bribe, now they just need to appeal directly to the public, completely bypassing the political system in the process. It hasn't started with Musk, of course. The most obvious display of such power was the website blackout that led to the SOPA repeal. That showed politicians who really holds the power. These companies barely flex their muscles either; just imagine what would happen if Google decided to get into public shaming in its homepage for entities trying to block its Fiber initiative. The public no longer believes politicians, but they all believe Zuckerberg, Page and Musk. That makes for an interesting future.
  • stcredzero 13y ago
    The public no longer believes politicians, but they all believe Zuckerberg, Page and Musk. I suspect they really only have a portion of the public -- including Musk.
  • tonyhb 13y ago
    > The public no longer believes politicians, but they all believe Zuckerberg, Page and Musk People are given a lot of information from a lot of sources nowadays, which means they're better at analysing it and weeding out the bullshit(typically). Your point assumes we're blindly following what they have to say without analysing it. I can imagine a lot of people aren't. A lot of people may be annoyed with their rights or privacy taken away (SOPA), or laws being changed when it doesn't benefit them (this). At which point, people complain. If any tech company tried to push a law that didn't benefit the public in an obvious way, I bet most people wouldn't like it.
    • npizzolato 13y ago
      >People are given a lot of information from a lot of sources nowadays, which means they're better at analysing it and weeding out the bullshit(typically). Or people find the version of the "truth" they most agree with and just go with that. Given the huge industry of politically-charged "news" organizations, I think there's a significant amount of people that are doing this instead (sadly).
• mncolinlee 13y ago
  Having bought a Nissan LEAF, I can say with confidence that traditional auto dealers are where electric vehicles go unsold. Numerous members of our electric auto owners group share the same exact stories. You go to the dealer specifically asking for an electric car and the salesman tries to make you change your mind to another vehicle. Considering the bonus structure at most dealerships, there is no incentive to sell an electric vehicle. First, the dealership may choose not to participate in selling electric models at all. Second, there is usually only one or two people allowed to sell an electric vehicle because your salesperson was not trained. Who wants to lose a customer and a bonus to another salesman? Third, it takes longer to sell an electric vehicle because you have to explain everything that gas car owners already take for granted. You make less money by spending more time. This also leads most salesmen to push for 10% over MSRP, harming sales. Finally, some very corrupt dealers go so far as to deliberately discharge their vehicles and leave them that way so they won't have to try selling them. Dealers have little incentive to sell the entire lineup of manufacturer vehicles if they have to train and hire more sales staff for one model. Some dealership owners may even may be politically opposed to the idea of electric vehicles.
  • MartinCron 13y ago
    It's amazing to think that even with all of this horrible experience at Nissan dealers, the Leaf is still selling so well. Imagine how strong it would be if they had real retail support.
    • mncolinlee 13y ago
      Actually, the worst stories came from Ford and GM dealers. Among Nissan dealers, it was more likely they either chose not to participate, told you to come back later for the right salesperson, and/or charged 10% over MSRP and refused to offer the base model.
• SurfScore 13y ago
  Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia. "Cross an imaginary line a few miles down the road that the auto dealers can't access and everything will be A-OK!" This is everything that is wrong with politics in a sentence.
  • zem 13y ago
    the entire modern geopolitical setup is based on complicated networks of imaginary lines.
• atmosx 13y ago
  Could someone explain to a European, in simple words, how the franchise-dealer-factory thing works? If a dealer is the company who actually sales cars and the factory is the one that produces them, why do they need a franchise in between? And how come that a dealer is comparable to a manufacturer Tesla? Why do they have conflict of interests selling non-gasoline cars?!
  • softbuilder 13y ago
    It's not a franchise in between. The terminology makes it more confusing than it should be. The dealers buy franchise rights (right to sell that product) from the manufacturers, becoming "franchisees" - franchise owners. So my local Chevy dealership has a franchise from GM. Typically they also have rights to perform service and are certified for repairs on various brands.
    • atmosx 13y ago
      thanks, clearer now. :-)
  • ghaff 13y ago
    A dealer IS a franchisee. They've been given a franchise by the manufacturer to sell (and service and offer financing for) cars in exchange for meeting a variety of conditions. A similar model is followed for many types of chains, such as restaurants. So the dealer is a middleman that performs various tasks that the manufacturer would otherwise have to do themselves. US auto manufacturers originally went with this approach to avoid many of the costs associated with selling direct (and generally setting up their own manufacturer-owned dealerships).
    • atmosx 13y ago
      ty :-)
• rdl 13y ago
  It's interesting that Christie seems to have totally given up on being a viable national political candidate, after the drive slow thing with the bridges, this, and some other issues.
• grellas 13y ago
  Paternalistic meddling with free consumer choices is always fraught with peril. Sometimes it is necessary to protect important principles in society. You can't discriminate based on race - that limits choice but who would support the contrary? You can't defraud people in selling products - ditto. You can't buy land to build a smokestack plant in a quiet residential neighborhood - ditto. Many other examples might be cited. In all such cases, the law intervenes to limit private choices. And there are few who would not applaud most such limits. Private choice is not the end all and be all of a society. Yet, in a free society, private choice should be the overwhelming norm and it should require surmounting very large barriers before legal meddling can limit the choices people can make to serve their own best interests. Unfortunately, in old-line industries, this idea got flipped and, for years, private choice succumbed to whatever a combination of big government, big corporations, and big unions dictated to the public. Back in the day, writers such as John Kenneth Galbraith even used to celebrate the idea of a "new industrial state" in which the old private competition would yield to ever increasing concentrations of power among government, industry, and labor, who would in turn find ways to "cooperate" with one another in ushering in a more enlightened form of carving up markets and their benefits than mere freedom and competition might provide. Well, the bureaucratic edict in New Jersey is a relic of that old thinking, perhaps perversely and cynically applied to buy off lobbyists and influencers but rationalized nonetheless by the old paternalistic thinking that the consumer is ultimately best served by having his betters making his buying choices for him rather than being allowed to make them for himself. Other than in this cynical sense, there is no possible way in which this outrage can possibly be characterized as "protecting" the consumer. Perhaps the main contribution made by the tech revolution since the 1970s is that it ushered in an era of huge freedom in how people managed their private lives. The internet in particular has been a huge liberating force and so young people especially have come to take it for granted that they can freely make all sorts of choices without having to feel burdened or restricted by the heavy hand of the law. Of course, exceptions can and do remain because abuses can pop up in all sorts of ways without any legal restraints. But, that said, the overwhelming presumption today is that, yes, I can do pretty much what I feel is best for me unless there is a very good reason why I should be restricted from doing so. And that means, if I live in New Jersey, I should be able to find a local Tesla outlet in which I can buy my electric car if I want. The thought that some politician or bureaucrat should be able to dictate serious limits on that choice is repugnant to anyone who thinks that way. And, in my view, rightly so. Unfortunately, where the old political pull persists, the law can be abused to protect old-line market players under some guise or other that is a mere pretext for guarding them from competitors who might offer something better and wind up dislodging them in a free market. Legal regulation is not to be rejected out of hand, of course. Maybe the old-line taxi services ought not to have their business cherry-picked by new market entrants who do things differently. Maybe there ought to be some limits in an urban context on absolute free space-letting if this creates nuisances or the like. The line can sometimes be tricky to draw and can require careful and fair-minded judgments given the interests at stake. But how often do we have situations where nothing of the kind happens and instead the issues are decided, in essence, by who pays off whom and who has what degree of political or bureaucratic pull that can be used to protect systems and structures that are far inferior to what the new competition might offer. I believe that, in these sorts of cases, the tech impetus will ultimately prevail and push things toward broader and freer areas of choice for consumers. Even with this rear-guard action in New Jersey, Teslas can be bought direct from the manufacturer just a short distance away or via remote ordering. And tech-inspired sales and distribution methods in this and a broad swath of other fields will mean that those seeking to limit consumer choice by protecting local turf through bureaucratic pull will be fighting what will ultimately prove to be a losing battle. As consumers, we are not bottled up anymore. If we don't like something that is really stupid, we can more and more work around it using other solutions. And so we can, I think, basically see that what the local commission is trying to do in New Jersey is much more a last gasp for the old ways as opposed to being a harbinger that will limit Tesla (or any similar new-wave competitor) from accomplishing its goals. Tesla is right to oppose and fight it (and presents a compelling argument for its view). But the action stands out as so bizarre precisely because it is so out of step with the tech impetus that rules our day. It will stand legally (courts are loathe to intervene in such matters). But the longer-term political winds are against it, in my view, and it will prove a temporary obstacle at most as the modern tech impetus advances.
• a1a 13y ago
  > all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer It's an interesting future. We are approaching the age of malware infected cars. Does anyone have more info about what the limitations of this internet connected system is? What is possible if someone roots my car? - Can they disable security system? - Unlock the car? Lock me out of the car? - Feed false data (slow destruction of car)? Feed false speed-data? False directions? - Obtain the cars whereabouts? - Disable breaks (would assume not)?
  • zmjjmz 13y ago
    Hopefully those updates are signed, in which case as long as there aren't user install-able applications it should be fine.
• Systemic33 13y ago
  So much for the american "free market"... What a joke. As a european, i can't even comprehend how ludicruous it sounds that a business can't sell it's goods directly. It's so outrageously wrong, that I can't find words that fit adequately.
  • mcv 13y ago
    I agree, it sounds ludicrous. But there are plenty of ludicrous instances in the EU where free trade gets banned by some stupid law legalizing a monopoly. As much as I'd like it to be, the EU is hardly perfect in this.
    • stcredzero 13y ago
      What makes it ludicrous is how much noise US politicians on the right make about "free market" and how they vilify "socialism" then turn around and pass legislation that implements massive market-distortions. It's basically massive demagoguery and corruption.
      • bubbleRefuge 13y ago
        So true. If conservative talking points would concatenate the String s = "except when it favors the 1%," they'd reflect reality. "Free market regulation is bad for the economy " + s "Government services are handouts and immoral " + s etc. etc.
• bane 13y ago
  The truth is, car dealerships, which are mostly locally owned, are a way for a state to boost revenue capture and generate jobs. In New Jersey, not being able to pump your own gas is the same deal. Look at the economics of a Tesla dealership, for every car sold in New Jersey, how much of that money stays in New Jersey? And let's be honest, being a car salesman is not the most lucrative or respectable of trades. The jobs are usually temporary so down on their luck folks can try and earn some money while looking for something else. Ensuring a state has dealerships possibly out of work people can fall into for temporary jobs is like having a social welfare program without having it on the books. It sucks, but if you were a legislator in NJ, would you rather Tesla's profit went all out of state to Tesla, or if your citizens could get a crack at some of it and have it circulate around in the local economy for a bit. It's unpopular, and us tech folks don't like it, but from a NJ legislator's position it's pretty rational. The correct answer of course is to foster a local auto industry and get a company to make and build and sell cars from out of NJ elsewhere. But that's too impossibly forward looking.
  • Edmond 13y ago
    >It sucks, but if you were a legislator in NJ, would you rather Tesla's profit went all out of state to Tesla, or if your citizens could get a crack at some of it and have it circulate around in the local economy for a bit. I was making a similar point earlier. In fact I wouldn't be surprised if over time we start seeing more laws passed to encourage more of the money citizens of states spend to stay in-state. I think this is going to become a serious concern over time, how are local economies going to thrive if we keep buying stuff online and all the major online companies are somewhere in SV?
    • bane 13y ago
      Right, it's actually the job of the legislature to try and pass laws and create regulations to advantage their market over external competitors -- even if that means creating local monopolies. It sucks that New Jersey has to think of California as a competitor (after all, aren't California and New Jersey domestic territories of the same country?), but resources are finite. And if you, as a legislator, think bringing money and jobs into your state doesn't matter, you have another thing coming: https://www.google.com/search?q=%22attract+business+to+the+state%22&oq=%22attract+business+to+the+state%22&aqs=chrome..69i57.5806j0j4&sourceid=chrome&espv=210&es_sm=122&ie=UTF-8 https://www.google.com/search?q=%22attract+business+to+the+s... You'll find endless concern from every state about how to attract businesses and jobs to their state. It's not a coincidence that Hyundai opens a manufacturing plant in Alabama instead of someplace cheaper or more recognizable. http://www.enquirer.com/editions/2002/04/06/fin_alabama_put_forth.html http://www.enquirer.com/editions/2002/04/06/fin_alabama_put_... The problem with New Jersey doing this vs. Alabama is that the mechanism for Alabama to get Hyundai is pretty direct and pretty clear. Offer incentives to Hyundai, get a plant and a couple hundred jobs (plus the indirect halo effect on the economy outside of the plant). For New Jersey it just looks like they're protecting shady car dealers by generating an artificial monopoly. The optics on it are terrible, it looks corrupt and petty, and the public rationale "it helps the consumer" is clearly false, but the practice is pretty much the same. There's absolutely nothing that prevents Tesla from setting up a franchised dealer network in New Jersey, selling their cars cheap to the dealers and then having the dealers keep a cut while generating jobs in the state. It's "spreading the wealth around" from CA to NJ a bit. The only thing that prevents Tesla from doing this is that Tesla wants to maximize the profit share they see from the car sales. The thing is, because Tesla has been very public about it, they know there is room in that large 25% profit margin per vehicle (Honda makes about 15% per hybrid) to "share a little".
• puppetmaster3 13y ago
  Musk, you need to make donation to the right politicians. N00b.
• ValG 13y ago
  This just got reposted on the NPR site, it's highly relevant and timely along with this law and Elon's response: http://pcasts.in/9Ruq http://pcasts.in/9Ruq? In it, some argue that "A no haggle, painless car buying experience will eventually come; but it won't be without your local dealers" I wouldn't be so sure. As Elon states, the fundamentals of the industry haven't changed in quite a while. He's approaching it from one direction (The cars/manufacturing and sale of new cars), and others (like myself and partners) are going directly after the used car Buying/Selling process. Our goal is to make it as easy as possible for Sellers/Buyers to transact. Check us out here: http://www.instamotor.com/ http://www.instamotor.com/
• tinalumfoil 13y ago
  TL;DR: Elon Musk disagrees with the decision and viciously attacks Chris Christie , Auto Dealers, the State of NJ and compares their reasoning to the mafia. He also encourages you to buy a tesla car before the laws take into effect. Tesla will continue to lobby and possibly sue for a change.
• ZeGoggles 13y ago
  "The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of “protection”, this is obviously untrue." This is weird. Really weird. It's raw and exaggerated...almost a cartoon. I'd believe this is raw Elon Musk, but why is someone letting raw Elon Musk define this campaign? Remember raw Bill Gates? Did we learn nothing from that? Or maybe we learned a lot. And "we" have developed an affinity--a need--for the brash genius. I'm probabilistically wrong--Tesla's doing well. But something about this appeal, the wording, makes me react atavistically, "Go fuck yourself. Nothing is obvious." I had an argument here, but it didn't seem important, so whatever. Dogecoin and such. Also hyperloop. But really, hyperloop. But remember, I was right about New Jersey. Poor New Jersey.
• sidcool 13y ago
  The ugly side of capitalism. But that does not make the whole system bad. There are those who will always stall progress for profits, and there are those who will surmount the bullies. Go Elon!
• sadfnjksdf 13y ago
  NJ can just buy from nearby states. Not a good solution, but whatever.
• zobzu 13y ago
  I think the major point is that we want to be on his side. As long as hes not saying or doing something completely wrong, I'm sure we all agree there are huge issues with the govt, laws and corruption and that any strong voice attempting to fix this is a good thing. There's also a lack in innovation and lead from the US market in various technologies. Elon Musk took all of these things head on and keeps doing so all the time. What's not to like, I would ask? I am 100% behind the man as long as he keeps doing so.
• acd 13y ago
  I think that oil is poison for humanity, it leads to resource conflicts and providing money for evil governments. Thus we need to get off oil to have long term peace on earth. Elon Musk is a hero
  • stcredzero 13y ago
    It's not oil or other resource conflicts that are poison per-se. It's a system of conflict resolution that eventually and too often turns to armed conflict as "diplomacy by other means." It's also a "human nature" that is prone to having one group of us kill another as a means of conflict resolution. Unfortunately, that is apparently a part of the natural behavior repertoire of Homo sapiens and Pan troglodytes. I assure you that governments will continue to do evil things and will find the money to do so, but over time governments will become less evil.
• hyp0 13y ago
  such pleasure to read Musk. he's got that evangelial air... of course, it helps that he's in the right. I wonder if he'll end up Emperor of Mars?
• lnanek2 13y ago
  This is pretty standard for New Jersey. It's common for money from highway projects to get diverted, or tolls to go into people's pockets long after roads were paid for, etc..
• kator 13y ago
  My father worked for 30+ years in auto dealerships. He was a mechanic and in the end worked his way up as the service manager. It was made clear to him that sales had to make money and service had to make money and they didn't care how it was done. He is a good and honorable man and even quit one dealership because they pushed crazy service incentives on service writers to up-sell every kind of service you can imagine. That said in the end he retired early because the dealership he was at was bought by a consortium of dealerships and they let him know that his service shop wasn't as profitable as needed and that he needed to up-sell more services to the customers. In the end dealerships are about making money from their clients by "adding value". Sadly most of the time that value is having the black car in stock -vs- someone down the street who only has the blue one. It's sad to see a government more concerned about backing the establishment then creating an environment for free trade and new business models.
• AgathaTheWitch 13y ago
  I will be glad to move out of Jersey (likely next year). I live in Fort Lee and was trapped in "Bridgegate" traffic last fall. My cautious optimism over Christie has faded over the years as he has so transparently started focusing on positioning for 2016. This cave-in to the dealership lobby is just another reason to take my talents and tax dollars elsewhere.
• Jugurtha 13y ago
  "To the People of New Jersey".. I can picture a Marsian saying this. Oh wait, it's Elon Musk :)