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Tesla Increases Lobbying Efforts To Break Into Michigan


William Maley

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Last year, the State of Michigan signed a bill that banned an automaker from doing direct sales. This meant an automaker like Tesla couldn't sell any of their vehicles in the state. The move was widely applauded by the likes of GM and the Michigan Automobile Dealers Association. Tesla wasn't impressed by this and since then has been working on trying to change this.

 

But it hasn't been going well. While the company has been trying to educate lawmakers and state officials, it seems everyone in the state doesn't want to bring up the debate.

 

“There doesn’t seem to be much interest from not only the dealers, but manufacturers like GM that want to continue to shut us out of the market entirely,” said Jim Chen, Tesla’s vice president of regulatory affairs to The Detroit News.

 

“We’re an American company that is building cars in the United States that is using over 55 Michigan suppliers — that is spending over $120 million in parts and components from Michigan suppliers to build American-made cars. Why shouldn’t we be allowed to sell in Michigan?” Chen went on to say.

 

Terry Burns, executive vice president of the Michigan Automobile Dealers Association says Tesla is welcomed to the state, but they have to go through dealers.

 

“They’re an automotive manufacturer, and the Michigan law says that manufacturers need to use dealers in order to sell vehicles. That’s Michigan law. We would welcome Tesla here. But we would think that as with all the other businesses that come into Michigan, they would want to follow the law,” said Burns.

 

Interestingly enough, the state senate introduced a bill back in April to allow direct sales of three-wheeled “autocycles” to consumers in Michigan. A key automaker who stands to benefit from this is Elio Motors. In response, the Federal Trade Commission (FTC) issued a statement that criticized the move.

 

"Automobile manufacturers have an economic incentive to respond to consumer preferences by choosing the most effective distribution method for their vehicle brands," FTC officials wrote.

 

Tesla plans to continue their lobbying efforts in the state.

 

“We have the majority of next year to lobby, discuss and debate the merits of what we think is a co-existence of our business model in the state of Michigan," said Will Nicholas, Tesla’s government relations manager.

 

Source: The Detroit News


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To be fair, it really is not crying over spilled milk more than it being sentencing Socrates to drink Hemlock because he was 'corrupting young minds'...

 

You do know what Socrates said in his final speech dont you?

Anyhoo, hopefully Telsa does not share the same fate as Socrates, however, Isee the same zealousness as with those Athenians as with these Michiganders...

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I think Tesla, in interest of furthering sales, might just end up having dealerships.

 

It moves the trouble of dealing with short-term demand fluctuations- such as cyclical buy habits and what it does to inventory to the dealers.

 

But having just one price, and one price for all is very succulent...

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sure, let em sell their kit cars there!

Nothing 'kit car' about them...weird to think they aren't sold in some states.  I seem them daily on the streets here in Phoenix/Scottsdale, and the parking garage for my office tower has at least 4 of them, maybe more. 

Edited by Cubical-aka-Moltar
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Uh..... 

 

Tesla would be the first automaker to have a kit car become MT's 2013 Car of the year and Consumer Report's Highest rated sedan ever (it's not longer a top pick...but highest rated tho).

 

Kit cars or not, built in a backyard garage or not, lacking absolute luxury or not, they have changed the game forever.

 

If anyone has a $100,000 or more burning hole in the pocket caused by buying an electric vehicle, you can be sure they bought a Tesla.

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Last year, the State of Michigan signed a bill that banned an automaker from doing direct sales. This meant an automaker like Tesla couldn't sell any of their vehicles in the state. The move was widely applauded by the likes of GM and the Michigan Automobile Dealers Association. Tesla wasn't impressed by this and since then has been working on trying to change this.

 

So the UAW and traditional dealers are still scared.  

Edited by Scout
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It is not that they are scared but the fact that they want a level playing field.

​The standing MFG's have been forced to work with the dealer system by law from the start. They have at times tried to challange this system and were stopped by the goverment.  Now that they are loaded with the dealers they can not shead them unless they want to go out and buy them out at a major expense.

​What they fear is not Tesla but China. If you kill the dealer network China could fload all sorts of retailers with cheap cars from overseas and not be stuck building a dealer network the others can not get rid of.

​Hell I China wanted to their MFG could just sell from Sams Club, Best Buys or whom ever they want.

 

Tesla makes lots of headlines and has made progress but they are still a blip on the radar. They have only sold around 90,000 sedans and and a handful of roadsters. The X model is still late and counting with what has been discribed as many complex systems that will cause them more grief than needed. The doors have been discribes as working with the speed of two arthric stage hands pulling up a curtain and the car will hold challanges even Toyoata would struggle with As for the 3 model it is no where close to being here. They sold themselves as an American car but now appear to be considering thje 3 for production in China even with space still open at their plant in Fremont. Cost I think Elon is finding going to be tougher to keep down than he expected.

 

Tesla I think will have advanced the EV cause well in the public eye but like many Silicone Valley makes they will have to change or they will vanish like many before.

 

It has been recomended by Merrill Lynch that they should consider becoming a suplier of EV systems and parts to the other brands and drop the cars. This would be a smart move as even like the Gold Rush of 49 it was the people who supplied the tools and provisions that made money not so much the gold Minners. I even Believe the Fremont name sake was one of them. As long as they build cars no one will buy their systems but as a supplier others who can not make their own would show much interest. Then dealers are not an issue for them.

 

I am not a Tesla deciple but I do want them to not fail. If they fail they could do a lot of damage to the EV models remaining as many people still do not understand or trust the models. This is a slow grow segment that was the Chicken or the Egg in getting started. Tesla spured the others into investing more as they showed that one could sell a more expensive EV sedan. This helped them invest knowing they could add models at a higher price and not lose their shirt on each one. That is where Tesla contibuted.  But with the potential of a very expensive X model with things that could be issues that did not need to be, Aslo a 3 model that will be every bit as late and possibly from China their future is still very much at risk. Someone like VW can  make a major mistake and survive someone like Tesla makes one mistake like a failed X model with issues and it could damage them beyond what they can survive.

​Also note why they struggled to get the X and 3 models going they still need to address the S model updates. They need more than software changes as a redesign should be done soon as the car is aging and more competitors are coming. They could become yesterdays news to those with $100K buring in their pockets.  

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^ I agree with what you have stated Hyperv6, I also think Tesla should be a powertrain supplier. They could make more money and resolve the whole dealership issue.

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" “We’re an American company that is building cars in the United States that is using over 55 Michigan suppliers — that is spending over $120 million in parts and components from Michigan suppliers to build American-made cars. Why shouldn’t we be allowed to sell in Michigan?” Chen went on to say."

 

I thought this little line within the reading was pretty awesome.

 

While they are asking for a level playing field they also realize they're doing this to a company not yet profiting. It screams more "fear" that just wanting a level playing field at this point. Had Tesla been making tons of money and actually stealing sales from the D3 I could see it a little different. but at this point we're talking about a company that's relatively small being banned form one state because they decide to sell their vehicles differently than they do.

 

 

Hyper, you made very good points. :thumbsup:

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The bottom line is that it's about money.  The dealer laws were established in the early 1900's and are antiquated.  The Tesla model is cheaper, and the NADA is screaming it's not fair.  Perhaps not, but just because something has been so for a long time does not make it rite.  NADA is near the top of all time political donations, and dealers account for about 15 percent of all retail sales in the US.  So Musk has an uphill battle against an established way of doing things.  Not because one way is better than the other.  But because one side is dug in and crying about whats fair.  

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The bottom line is that it's about money.  The dealer laws were established in the early 1900's and are antiquated.  The Tesla model is cheaper, and the NADA is screaming it's not fair.  Perhaps not, but just because something has been so for a long time does not make it rite.  NADA is near the top of all time political donations, and dealers account for about 15 percent of all retail sales in the US.  So Musk has an uphill battle against an established way of doing things.  Not because one way is better than the other.  But because one side is dug in and crying about whats fair.  

 

This.

 

Super bump.

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Jaguar, Land Rover and Mini are pulling out from Detroit too...

 

(I cant post links with my tablet, but I assure you, it is for realz what Im sayin')

 

One could have the same assumption of Tesla going down the road of irrelevance along with Mini and quite possible Jaguar by pulling outta Detroit....but when Land Rover is also amongst that list, and Ive also heard rumours that other biggish names also question their presence in Detroit, it leads ME to believe that 'tis the Detroit auto show that is one step in the direction of irrelevance....

 

And Im sure many others feel the same way about Detroit' auto show and how Detroit may not be as important as it once used to be...so....Im sure Tesla is just fine in skipping Detroit...

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Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

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Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

How is it fair to force HOW somebody sells their product? Why is making somebody build a dealer and pay people to sell their product fair?

You don't force any other industry to go through a "dealer network" so why does a car have to be different?

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Mr. Tesla's name is being sullied by this blowhard.  He needs to STFU.

 

You manage to sully Ford in nearly every post you make.

May I suggest the same.

 

Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

How is it fair to force HOW somebody sells their product? Why is making somebody build a dealer and pay people to sell their product fair?

You don't force any other industry to go through a "dealer network" so why does a car have to be different?

 

 

 

Perhaps you missed it the first time I typed it, so I will bold font it for you.....

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Mr. Tesla's name is being sullied by this blowhard.  He needs to STFU.

 

You manage to sully Ford in nearly every post you make.

May I suggest the same.

Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

How is it fair to force HOW somebody sells their product? Why is making somebody build a dealer and pay people to sell their product fair?

You don't force any other industry to go through a "dealer network" so why does a car have to be different?

 

 

Perhaps you missed it the first time I typed it, so I will bold font it for you.....

Maybe you didn't realize the question I asked.. What about that is actually fair? Just because those are the rules doesn't mean they are actually fair. That basically makes it impossible for a new automaker to join the battle.

IMO, I think they could retain the bull$h! dealer network thing but I think they could allow direct sales for small companies. Maybe put a cap on either sales or revenue/net income/profit that will only allow they to sell so many vehicles before needing to form a dealer network. This will allow a smaller company to start up with waaaay less necessary costs to get their feet under them.

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Mr. Tesla's name is being sullied by this blowhard.  He needs to STFU.

 

You manage to sully Ford in nearly every post you make.

May I suggest the same.

 

Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

How is it fair to force HOW somebody sells their product? Why is making somebody build a dealer and pay people to sell their product fair?

You don't force any other industry to go through a "dealer network" so why does a car have to be different?

 

 

 

Perhaps you missed it the first time I typed it, so I will bold font it for you.....

 

Sir, that is for your benefit, because you are so rabid and you cut and paste too many posts right off the PR machine.  Truth be told, I love all three domestic automakers, but I am not going to cut them slack if they eff up, imo.

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Mr. Tesla's name is being sullied by this blowhard.  He needs to STFU.

 

You manage to sully Ford in nearly every post you make.

May I suggest the same.

 

Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

How is it fair to force HOW somebody sells their product? Why is making somebody build a dealer and pay people to sell their product fair?

You don't force any other industry to go through a "dealer network" so why does a car have to be different?

 

 

 

Perhaps you missed it the first time I typed it, so I will bold font it for you.....

 

Sir, that is for your benefit, because you are so rabid and you cut and paste too many posts right off the PR machine.  Truth be told, I love all three domestic automakers, but I am not going to cut them slack if they eff up, imo.

 

 

I can say the same exact thing.

 

Sir

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Fair game, let them play by the same playground rules. And I am curious how much price increases when dealerships and sales persons are involved.  Who do they think they are, wanting their own set of rules, as they themselves would love nothing more to see than GM and Ford go belly up.

 

Efff Tesla and Efff Musk.

 

And btw, in a few years there will be many more BEV and hybrid and PHEV solutions from GM and Ford, and everyone else.

I will not shed one single tear if Tesla folds in the interim.

And I hope Tesla flips the establishment on it's old ear. No one company has the right to tell another company how to sell their product. The tactics being used by the old guard are typical of companies that are scared of change. To them I say, suck it up buttercup. Change is coming. You can adapt or get left behind.

Edited by surreal1272
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      Right now, you are probably thinking: “Anthony, you are forgetting the king of electric vehicles. They are synonymous with electric cars and have a huge cult following.” Guess who that is? Yes, that is of course Tesla. You can’t write about electric cars without talking about Tesla. They are a very S 3 X Y R brand indeed. The Model S introduced expensive but seriously quick electric vehicles. The X brought us an odd but much-needed crossover. The 3 is the bread-and-butter maker with a starting price around $40,000, and acceleration that beats almost all vehicles in its class. The Y hasn’t come out yet but is a crossover version of the 3, and the Roadster is a $250,000 supercar. Even though there are three models currently available, I will focus on the Model 3 Performance since that is the one I am most interested in.
      There is a lot to like about the Model 3 Performance. It has “performance” in its name and with 450 HP, it is one of the quickest sedans I’ve ever driven. The instant torque from the motors is intoxicating and it handles well for a heavy vehicle. Does it tick all the boxes to convert to a Tesla-fanatic? No. Why? The interior. I am not a fan of controlling absolutely everything with a touchscreen and not having my speedometer in front of me.
      The Model 3 Performance can have semi-autonomous driving, but it is a $7,000 option. Tesla’s Autopilot driver-assist system is standard and is regarded to be one of the best, if not the best driver-assist system. Tesla has sold over 250,000 Model 3 vehicles and it is a genuinely amazing feat for a young company. The range is good at over 310 miles. Pricing starts at $55,000 and is fully-loaded around $64,000. If you are okay with the minimal interior and styling, get yourself a Model 3. I personally am not a fan of either of those, so onward we go.
      This brings me to a car I am waiting for: The Polestar 2 fastback. Polestar used to be a sub-division of Volvo, like AMG is to Mercedes-Benz. You can still get Polestar-tune Volvos, but Polestar has branched out into their own brand. The Polestar 2 is their first all-electric car. It has over 250 miles of range, 400 HP, and most import to me, gauges that are straight in front of the driver. The design is bold yet looks like an even more modern version of a Volvo. Since Polestar is a sporty company, the performance upgrades include upgraded shocks, brakes, and bigger wheels with Swedish gold seat belts. You get this package mainly for the gold seat belts. Is it pricey at over $60,000? Yes, but it feels justified for the 408 hp and range of 275 miles. 0-60 is said to be around 4.7 seconds but I suspect it will be lower. Will they sell Tesla Model 3 numbers of them? I highly doubt it since they area new brand, but it should be a great competitor to the Tesla Model 3.
      I like the concept of electric vehicles. I know that one day, there will be one charging at my house. Am I ready for an electric car? Yes. Is there any on the market that jumps out at me and gives me the satisfaction I have for my current car at a reasonable price of around $40,000 new? No.
      Do not get me wrong; there are electric cars that make sense for a multitude of situations. Range and charging are getting better, more features are getting added, and manufacturers are creating electric-only ranges of vehicles that will bring down the costs of more performance-oriented vehicles. I can go in-depth about certain electric cars in a future article. For now, I think I will keep my car and wait until something really catches my eye. That, or wait a few years and hope the Porsche Taycan depreciates enough that I can buy one.
       
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