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Car Dealers Complain To DMV About Tesla's Website 364

cartechboy writes "State and national car dealer groups have been battling Tesla Motors for years, trying to stop them from selling its electric cars directly to buyers. Most of the time, the dealers work behind the scenes to change state laws and and force Tesla to conduct its sales through 'independently-owned third parties' which are... well, car dealers. But in California, Tesla's operations are legal, so that tactic won't work. So dealers there are taking an interesting new tack — complaining to the DMV about Tesla's website."
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Car Dealers Complain To DMV About Tesla's Website

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  • Sour Grapes (Score:5, Insightful)

    by mythosaz ( 572040 ) on Tuesday September 24, 2013 @08:20PM (#44943131)

    The dealers have a few good points, but EVERYONE knows this is just sour grapes because the dealerships can't fleece potential buyers out of some more money off the top.

    Fucking scum.

    • Re:Sour Grapes (Score:5, Insightful)

      by jythie ( 914043 ) on Tuesday September 24, 2013 @09:14PM (#44943471)
      Yeah.. I am personally rather happy to see something finally taking a crack at their pattern. I hate hate HATE dealer and have worked hard over the years to never have to deal with one. The idea that they write laws forcing themselves as the only business options really annoys me.
    • Indeed.
      This is yet another dead business model which is not willing to admit it's time is past.

    • by rossz ( 67331 )

      Just last week a co-worker used their website tool to figure out his monthly payment. Pretty standard stuff that most car websites provide. What Tesla didn't do was make it obvious that they were subtracting the estimated fuel cost from the amount. It was dishonest.

      • by Imagix ( 695350 )
        Really? I just popped over to their website. Clicked over to Order a Model S, and it starts with value shown as "$601 / mo. Effective Monthly Cost", and a "calculate link" under it. Two things popped to mind. The word "effective" changes the meaning of the phrase, and so I wondered about what the effective really meant, so clicked the calculate. That showed me the estimated monthly payment ($980/mo), how much remaining incentive payments effectively (there's that word again) bring down your payment ($
    • Re:Sour Grapes (Score:5, Interesting)

      by Redmancometh ( 2676319 ) on Wednesday September 25, 2013 @02:56AM (#44945221)

      Forcing someone to use a middle man by law is pants-on-head retarded. If your model can't compete you're going to lose. This sounds an awful lot like RIAA/MPAA crap.

      It's not like tesla is going to impact their bottom line heavily - hybrids and electrics are disliked by a lot of people. Not to mention most people don't have that kind of money to drop on a car.

      This is just ridiculous. I hate people that bitch about "the corporations" at every possible chance, but this is almost certainly a result of our corporate overlords.
      So these dealers are entitled BY LAW to make money off someone's product? And you wonder why conservatives bitch about market regulation (even if they do hypocritically regulate the market anyways) well here's why. Regulation is good, but this isn't regulation this is bribery of our elected officials.

      I would give so much to be able to catch these corrupt fucks in the act of accepting a bribe.

  • how amusing (Score:5, Insightful)

    by iggymanz ( 596061 ) on Tuesday September 24, 2013 @08:20PM (#44943135)

    Telsa's claims might be misleading, but if you want a pathological lying sack of shit, look no further than your local car dealer.

    • Re:how amusing (Score:5, Insightful)

      by mythosaz ( 572040 ) on Tuesday September 24, 2013 @08:23PM (#44943173)

      Tesla's claims ARE misleading.

      They need to be clear about your out-of-pocket costs - your actual payment to Tesla's finance company.

      ALSO, dealerships exist only to fuck customers out of useless middleman money by skimming off the top and providing overpriced service.

      • Re:how amusing (Score:5, Insightful)

        by hawguy ( 1600213 ) on Tuesday September 24, 2013 @08:32PM (#44943235)

        Tesla's claims ARE misleading.

        They need to be clear about your out-of-pocket costs - your actual payment to Tesla's finance company.

        ALSO, dealerships exist only to fuck customers out of useless middleman money by skimming off the top and providing overpriced service.

        If you actually buy the car, the payment is quite clear on the paperwork... But really, If someone buying a $70,000 car can't float the $7500 tax refund until next year when he gets it back from taxes, then he shouldn't be buying a $70,000 car.

        • You may have stumbled onto why Tesla cars are so popular amongst the people who've bought them despite all the saber-rattling the dealerships are doing.

      • Re:how amusing (Score:5, Insightful)

        by mark-t ( 151149 ) <markt@nerdfl[ ]com ['at.' in gap]> on Tuesday September 24, 2013 @08:33PM (#44943253) Journal
        To be fair, however.... dealerships aren't particularly up front about that information either. You can calculate it yourself easily enough... but the figure that they advertise cars for is in my experience substantially less than what you'll actually end up forking out after all is said and done.
      • But then again, most makers that sell both direct and thru distributers/wholesalers/dealers will typically price their in-house sales to the public at full retail price (hey, lets call that the MSRP!) and heavily discount to the distributers/wholesalers/dealers, which lets the second tier dealer charge the same or less and still make $.

      • Re:how amusing (Score:4, Informative)

        by drkim ( 1559875 ) on Wednesday September 25, 2013 @02:42AM (#44945169)

        ...dealerships exist only to fuck customers out of useless middleman money by skimming off the top and providing overpriced service.

        I believe the term for this is, PIMP

    • Telsa's claims might be misleading, but if you want a pathological lying sack of shit, look no further than your local car dealer.

      Or it's the guy in back doing the actual financing. He makes sure he makes money on the front AND back end of the deals. I worked delivering new cars for a dealership for a time, and got to overhear some of the shenanigans that get pulled, including forging the customer's names to paperwork. (Leases are usually never good deals for the buyer, but the dealerships always make money on them.)

      • Re:how amusing (Score:5, Informative)

        by Darinbob ( 1142669 ) on Wednesday September 25, 2013 @03:07AM (#44945251)

        My first new car was Saturn, with the no-haggle price up front. So when I bought it and ended up at the finance guy I told him I was paying in cash, and the sparkle left his eyes so fast I thought the lights had gone out. Nothing like being forced to do some paperwork without getting a commission to ruin a dealer's day.

    • Re:how amusing (Score:4, Insightful)

      by jythie ( 914043 ) on Tuesday September 24, 2013 @09:20PM (#44943511)
      And that is the problem. These practices are so common that if Tesla did not do them, people wouldn't look a them and go 'oh, how honest!', they will look at the prices and think they are oddly more expensive. When everyone in an industry is dishonest in the same way consumers tend to compensate, even if they do not realize it.
    • by slick7 ( 1703596 )
      Whaaa! I can't cheat and lie and obfuscate the truth. Whaaa!
  • by Anonymous Coward on Tuesday September 24, 2013 @08:20PM (#44943143)

    After 30 years of automakers blatantly providing theoretical and incredibly optimistic EPA estimates for gas mileage, you'd think that dealers would be willing to give a little on another car maker fudging some other numbers on their site.

  • bitch about it.

  • there's a reason why they call it disruptive technology, scumbags

    we don't need you

    • by sconeu ( 64226 )

      Hey, car dealers!!!

      I've got a buggy whip business I'm willing to franchise out to you!!!

  • no problem (Score:5, Funny)

    by Anonymous Coward on Tuesday September 24, 2013 @08:27PM (#44943199)

    I'm sure car dealers will have no troubles rallying massive grassroots support to put a stop to this menace to a cherished American institution.

    • Re:no problem (Score:5, Insightful)

      by jythie ( 914043 ) on Tuesday September 24, 2013 @09:23PM (#44943529)
      I am sure they will find a way. If not directly, they will try it indirectly like associating Tesla with political movements that make them sound socialist or otherwise un-american... or they will associate them with the _wrong_ elites (i.e. not the rich sexy people who deserve all they have and are better then us, but the wrong rich people who do not deserve their wealth and think they are better then us)... stuff like that. More then one way to convince consumers to screw themselves as long as you can tie your business needs to some pre-existing social narrative.
      • If not directly, they will try it indirectly like associating Tesla with political movements that make them sound socialist or otherwise un-american...

        Didn't Al Gore invent the electric car? Isn't that all you need to know?

        But seriously, this is clearly "sour grapes". Can there really be any reasonable reason why a consumer products company should not sell their product to anyone who wants to buy it?

    • what's the point of a car dealer anyhow. i'd rather buy directly from the manufacturer.

      • Re:no problem (Score:4, Insightful)

        by LMariachi ( 86077 ) on Tuesday September 24, 2013 @10:37PM (#44943941) Journal

        The manufacturers generally don’t want the hassle of owning and managing a nation-wide network of storefronts. As with any large retail franchise, having independent dealers provides them with a buffer of sorts: If the manufacturer’s much-hyped new model turns out to be a lemon, it’s the dealers who are stuck with the inventory. If a dealership goes out of business for whatever reason, it’s no skin off the company’s teeth.

        Dealerships exist for the convenience of the manufacturers, not the customers.

        • If the dealers are a convenience for the manufacturers then would not Tesla also take advantage of this? I understand your point but if private dealers are such a benefit then Tesla would not bother with direct sales.

          I believe that economies of scale come into play here, for very large auto makers independent dealers are advantageous. For small auto makers direct sales are advantageous. Should Tesla do well and sell many more cars there may come a time where direct sales do not grant them an advantage.

        • Re:no problem (Score:5, Informative)

          by Anonymous Coward on Wednesday September 25, 2013 @12:52AM (#44944767)

          Dealers dont get stuck with anything. The cars on the dealer lot are not paid for. If the dealer goes out of business the manufacterer eats it all. The cars are financed to the dealer through a credit agency owned by the manufacterer on a no money down, no interest, net 45 day till sale arrangement.

  • Free Enterprise! (Score:5, Insightful)

    by ebno-10db ( 1459097 ) on Tuesday September 24, 2013 @08:29PM (#44943217)

    Ain't free enterprise great in America? You can do anything, as long as you cut the vested interests in for a piece of the action. Thankfully though we're not a bunch of economically ignorant Neanderthals that would do something stupid like put a nickel tariff on a pair of socks. That would be interfering in commerce!

    • Re:Free Enterprise! (Score:5, Informative)

      by AlphaWolf_HK ( 692722 ) on Tuesday September 24, 2013 @09:12PM (#44943453)

      I think the reason we don't do heavy tariffs anymore is because it's already known that they only serve to damage the local economy. Sure you might save the sock salesman's job, but it'll have a much greater cost elsewhere in the economy that isn't immediately obvious.

      Say we put that nickel tariff on socks, does that make Canada (or any country for that matter) find our socks more attractive than China's? Nope, in fact they're now less attractive because they cost more here. In Canada the sock prices will go down, but ours will be more likely to remain higher (That's the whole point right? Otherwise why bother with this tariff?) Everybody needs socks though, so we all pay more for socks here than Canada might pay (because they don't have said tariff.) Since Canada now pays less for socks, they also now have more money to spend on other things than we do. So in the end, we've crippled our own economy relative to theirs by sticking that tariff on there.

      Historically this holds true - imports and domestic production rise and fall with one another. If you add that tariff to slow those imports, you're guaranteed to not only reduce exports, but you're also going to kill local jobs.

      Go have a look at the effect of the Smoot-Hawley tariff act. That was the cause of the great depression. It is the ultimate lesson to be learned about tariffs and why mercantilism is flat out wrong on so many levels. []

      Personally I think we should get rid of all tariffs. Corporations love tariffs by the way - and so do unions. They want tariffs so that they can protect themselves against competition and raise prices instead of competing proper. They do this at the expense of somebody else's job somewhere else, not really giving a fuck about them.

      • by jythie ( 914043 ) on Tuesday September 24, 2013 @09:27PM (#44943569)
        "the" cause huh?

        Sorry, but such a complex historical event can not be simplified to a single 'cause'. Then again, your entire argument reeks of simplification. A good tax strategy requires careful balancing of multiple types since they ALL have consequences. Tarrifs benefit some segments and hurt others, same with personal income, sales, property, license, and pretty much any other tax type. All of them try to take a cut of economic movement, but if you cut too deeply into one type or another it just moves elsewhere or breaks down.
        • Of course it benefits some segments, I don't think anybody will argue against that one.

          Just it benefits them at an even bigger cost to somebody else, which is a rather dick move. I often get accused of being a cold hearted libertarian, yet the people who make those accusations seem to think that having the government protect your job while kicking somebody else to the curb is such a nice benevolent thing to do.

          It's not just jobs that this impacts though. I mean the sugar sellers love not having to compete,

      • You helped prove my point. The whole issue of unnecessary rent seeking middle men like car dealerships, and how they get their cozy little businesses locked in by law, passes you by without comment. Meanwhile, a nickel tariff on socks merits a treatise on the wonders of "free trade". Hint 1: a nickel on a pair of socks ain't Smoot-Hawley. Hint 2: the political lock-in of car dealerships costs you a lot more than a nickel on a pair of imported socks would. That was kinda my point.

  • I have a Tesla S (Score:5, Informative)

    by technical_maven ( 2756487 ) <tom@t g t . o rg> on Tuesday September 24, 2013 @08:29PM (#44943223)
    It is a stupendous car, the ordering and delivery process was a dream, and the customer support after the sale has been flawless. The other dealers can simply go pound sand! Rather than bitching, try doing everything right like Tesla!
    • Let me begin by saying I Hate You. Don't worry, it's entirely due to jealousy. If you had the roadster, I'd probably be coming after you with a knife. :^D

      That said, I'm somewhat curious what happens when you have mechanical problems with your car? I'm not defending the dealer network but are there "Tesla Certified" car-repair places? It's kind of pricey to ship it back to Fremont. I'm sure there's a way to deal with it--I'm just curious what it is.

  • Ford Vs Musk (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Tuesday September 24, 2013 @08:30PM (#44943227) Journal
    Henry Ford fought the cartel of car manufacturers called American Motor Manufacturers Association which claimed patent rights to the automobile and demanded royalty payment for all car makers. Ford defied them, fought them all the way to the Supreme Court and won back in 1900s. Hope Musk fights the dealers, their cartels and their political shenanigans and win. As soon as I can afford it, I will buy a Tesla.
    • Re:Ford Vs Musk (Score:5, Insightful)

      by dk20 ( 914954 ) on Tuesday September 24, 2013 @08:56PM (#44943383)
      Not to troll, but i wonder what would happen in the "IP" era of the US economy? If Ford tried this today would he still win or would the "patent holders"?
      • Re:Ford Vs Musk (Score:5, Informative)

        by tgd ( 2822 ) on Wednesday September 25, 2013 @05:57AM (#44945881)

        Not to troll, but i wonder what would happen in the "IP" era of the US economy? If Ford tried this today would he still win or would the "patent holders"?

        Only people unfamiliar with history would call today the IP era. The period from the late 1800's through the early 1900's had vastly more corporate, patent, IP and such shenanigans going on. Today is almost comically tame compared to then.

  • by 140Mandak262Jamuna ( 970587 ) on Tuesday September 24, 2013 @08:33PM (#44943249) Journal
    From the article:

    It recently blasted Tesla Motors [NSDQ:TSLA] by accusing it of deceptive marketing and pricing practices in the information it shows on its website.

    The "It" in this quote is the auto dealers, a very well known group to be the paragons of virtue and personification of integrity when it comes to selling automobiles and providing accurate information.

  • ... auto manufacturers can be about real-world gas consumption of their vehicles.

    I'd call it even, personally.

  • by wjcofkc ( 964165 ) on Tuesday September 24, 2013 @08:38PM (#44943289)
    ...when companies are fighting it.
  • by Webcommando ( 755831 ) on Tuesday September 24, 2013 @08:51PM (#44943355) Homepage Journal

    From the fine article:

    Tesla fails to provide required information and shatters the notion of comparison finance shopping by including the potential availability of incentives, gas savings, and tax savings into final payment quotes for prospective customers.

    So the beef is that Tesla isn't being clear about everything and that upsets the dealers. hmm..

    In my local paper, the dealers have ads in every Sunday that advertise a low price. As it was a few weeks ago, I was looking to buy a minivan for the family (I'm not completely domesticate, I still have my convertible). Great price of $22k for a Town and Country...pretty amazing actually. Way at the bottom of the ad were the caveats--includes first car buyer discount, veteran discount, bonus trade-in amount, etc.

    Looking at the discounts there was no way you could be eligible for all of them at the same time. In my case, none of them. Yeah, those Tesla guys are devious and misleading.

  • by Arancaytar ( 966377 ) <> on Tuesday September 24, 2013 @08:53PM (#44943363) Homepage

    Just trying to make an honest livi---


  • by sk999 ( 846068 ) on Tuesday September 24, 2013 @09:22PM (#44943527)

    It is really shameful that Tesla is misleading customers with deceptive advertising about its electric cars. Here is a part of the complaint:

    "... the Association says that purchase prices on Tesla's website routinely include a $7,500 federal TAX CREDIT, despite the fact that the Congressional Budget Office states that only 20 percent of shoppers qualify for the alternative vehicle credit."

    None of the members of the California New Car Dealer's Association would ever stoop so low. Especially GENERAL MOTORS dealers. Especially since, according to this report: [] GENERAL MOTORS dealers represent over 25% of CDCDA's members. Surely none of them would ...

    Oh wait. []

    "Chevrolet 2014 Volt"
    "Net price shown includes the FULL $7,500 TAX CREDIT"

    Never mind, move along, nothing to see.

    • When the system is to try and make as much money as possible, how many Fair-Handed Champions of Equality and Justice do you expect? Of course people are only going to complain about the competition. The point is that the competition will do the same. If competition is too brittle to function in this padded jungle gym, then an entire free market would be a complete non-starter.

      btw, the chevy site gives only a pricing guideline since they're not selling the vehicle; the dealer is. Tesla is the actual dealer.

  • Remember this next time some businessman says he shouldn't be regulated because competition will sort everything out.

  • by Stumbles ( 602007 ) on Tuesday September 24, 2013 @09:43PM (#44943651)
    Car dealers are in the same boat as the media industry. Totally clueless how to adapt to the information age. Maybe at one time it made sense but not any more.
  • by pla ( 258480 ) on Tuesday September 24, 2013 @10:31PM (#44943903) Journal
    You guys used to serve a valuable purpose. Yes, you've always screwed us as hard as you could get away with, but hey, can't fault you for following the American Way to the American Dream.

    But now? Congratulations, the internet has made you nothing more than the place I go to test drive your products before I let the nearest 50 of you bid against each other for my next buy (and don't think I won't buy from the other side of the country if someone there has a good enough sale going on to cover the cost of shipping the damned thing to me).

    You had a good run. Congratulations. Now cash out before you run out of cash. Simple as that.

    Please, go down gracefully. Don't let this turn into yet another "when you can't compete, legislate" disaster. That just never goes well for the "legacy" side of the battle.
  • by brianerst ( 549609 ) on Tuesday September 24, 2013 @10:32PM (#44943909) Homepage

    Of course, we'll get a bunch of comments on how this proves that business men are hypocrites because they are against regulation accept where it benefits them and how stupid the libertarians are.

    But this is precisely the libertarian argument - if government becomes (overly) involved in business, rent seeking behavior is the natural result. Capitalism is a cruel mistress and businesses routinely fail, so they look for any edge they can get.

    In a lightly regulated market with low barriers to entry, they have to compete on service, price, convenience, etc. In a more heavily regulated market, first movers and existing and heavily capitalized businesses look to create new barriers to entry to prevent competition and create artificial scarcity to keep prices high. This can be via licensing (taxis and beauticians), regulations that have high fixed costs but low per unit/worker costs, monopoly/captive markets like dealerships and liquor distribution, and other regulatory structures that that favor fewer, larger firms to more, smaller firms.

    Ironically, the dealership structure began as a true capitalist trade-off - dealership networks allowed automobile companies to become large, centralized and efficient by helping to limit their capital costs - as inventory was created, it was immediately purchased and distributed across the country to local sources of capital. Car manufacturers got less money per vehicle but could concentrate their capital on plants, raw goods, workforces, etc. That dealership network absorbed a huge amount of the capital costs of the vehicles themselves. Once a lot of the manufacturers' fixed costs were paid off, the dealers saw the writing on the wall and used their local political connections to modify state laws everywhere to fix the existing model in place.

    Playing devil's advocate for one minute, the summary is misleading when it says dealers are "working behind the scenes to change state laws". In fact, they are working in the open to preserve the existing state laws - Tesla was the company attempting to have various laws changed to their benefit (in the Texas case, to their sole benefit as it was very narrowly written). That said, I would prefer a more broadly written version of the "Tesla law" to prevail.

    • Re:Rent seeking (Score:4, Interesting)

      by runeghost ( 2509522 ) on Wednesday September 25, 2013 @02:09AM (#44945041)
      Oh, bullshit. In any "lightly regulated market" that has enough total cash flow to make skimming worthwhile, a few big players will band together to exploit their customers by any means possible. The only demonstrated historical countermeasures the public can take are 1) government regulation (of varying effectiveness) and 2) lynch the bastards. Since option number two is basically anarchy, which has other unpleasant consequences, humanity usually opts for some flavor of option number one. The American flavor of Libertarians consists entirely of idiots who can't understand this simple truth, or near-sociopaths who are convinced they'd come out on top.
  • VP of Marketing (Score:5, Interesting)

    by EmperorOfCanada ( 1332175 ) on Tuesday September 24, 2013 @11:35PM (#44944393)
    Years ago I worked for a company that did a tiny bit of work for one of the big 3 US auto companies. Their VP of marketing told me that it was his dream to eliminate the dealer network. He basically blamed a huge amount of his company's woes on the dealers. His dream was that you could buy your car from a grocery store or by phone from a newspaper ad and maybe this whole new internet thing was just the key. It was his opinion that customers were growing to really hate the US car companies because the dealers were so sleazy. But it was his opinion that the car companies had grown to accommodate their sleaze. He thought that all the different models and features only served to confuse the customers.

    So wherever that guy is I am pretty sure he is cheering Tesla on. Plus based on what he said, I suspect the other manufacturers are watching and hoping but keeping quiet about it.
  • by Bill_the_Engineer ( 772575 ) on Wednesday September 25, 2013 @07:20AM (#44946257)

    WTF? Dealers complaining that Tesla may be deceiving customers about the true cost of their cars? Have they tried to purchase a car at their own dealerships?

    You're lucky you can get close to knowing what the final price will be before you start to waste hours in the salesperson "office" wondering why after all these decades they still perform the "Wizard of Oz" maneuver of having to ask the boss for a better price...

  • by Agent0013 ( 828350 ) on Wednesday September 25, 2013 @10:36AM (#44948019) Journal
    If Elon Musk gets busted for trying to make a big cocaine deal, then we know they have run out of new ideas at destroying a competitor.

"To take a significant step forward, you must make a series of finite improvements." -- Donald J. Atwood, General Motors