Florida situation aside (could be shady shit going on, would have to suss it out with some investigative work), other states that have allowed new automakers to sell direct have been provided the exemption because they don't have an existing dealer network they're competing with.
For legacy auto, the dealer network was a benefit (offloading local customer relationships, inventory, service) that is now an albatross they'll have to buy out. Just another combustion->EV transition disadvantage to incumbents (legacy auto dealers rely primarily on service revenue, and EVs require much less service overall). For example, GM had to buy out 150 Cadillac dealerships that did not want to pay for the costs involved to transition to EV products (~$200k/dealer). Ford is having problems with dealers drastically marking up their EV products with "market adjustment fees", discouraging uptake, and are attempting to twist dealership arms so they fall in line to compete against Tesla's no haggle pricing.
Elon probably influenced the carve out, but the Ban is all Dealer Lobbying
Auto Dealers at the state level it one of the most, if not most powerful groups in state politics, as a huge part of most state revenues are derived from taxes on Auto Sales. it is by far the most expensive item most people purchase that is subject to sale taxation
I am kinda surprised they allowed for a carve at all.
Would you really feel differently about any part of the situation if you found out he had nothing to do with it? He's still accepting the benefit of it and apparently not campaigning _against_ it.
"Will no one rid me of these meddlesome dealerships?!"
Tesla of course wanted direct distribution. Existing automakers lobbied against it. I guess each got what they requested, but only for themselves. It's sort of like a Judgement of Solomon response.
Sounds like a good way to hasten the move to electric. Manufacturers should stop updating gas models and focus all R&D on electric. Phase out ICE vehicles ASAP, and policy that encourages that is good regardless of whether it currently gives an unfair advantage to Tesla, Rivian, etc.
Not at all, whatsoever. This means that any company that sells ICE vehicles can’t even try to compete. So this strongly disincentivizes incumbents from moving towards EVs in Florida. There is no teleporting into a perfect future.
Depending on the state, in some states you always save money Vs. gas tax, but in others unless you're in the top 10% or even top >5% of drivers by miles driven, you're likely paying more in EV fees than gas tax would cost. If you only drive your EV low distances, you're particularly negatively impacted.
There are some programs meant to help with fix this, but they involve putting a GPS tracker in your vehicle that both drains the battery and robs you of your privacy, so you're exchanging one problem for another.
PS - Many of these states also target Hybrids and Plug-In Hybrids with these fees and many of the problems listed above also impact them.
I've long hated dealerships and their lobbying, but it's never occurred to me until now that it's odd that non-Tesla manufacturers don't out-lobby car dealerships (which they could easily do in terms of resources). It would lower the end cost for the consumer and therefore allow them to sell more cars, right? One study shows it would cut costs by 8.6%, which is huge
Can I hate all sides in this? Car manufacturers have a huge information asymmetry with end-users, which leads to ugliness like in-car tracking systems that insurers love. But dealers capture most of that information asymmetry because they can learn the tricks and people don't buy cars very often.
Yes, I want to pay a middle-man dealer for literally nothing other than some perceived right to screw me buying a car at a MSRP price plus "market adjustment" because they can!
If dealers won't sell at MSRP as good enough, it should be redefined as something that is beholden to only their greed, but not simply legitimized by dealers that feel entitled to get over on me adding to the legal price.
Dealerships are now akin to legalized scalping like StubHub and Ticketmaster adding superfluous charges and fees, and I will purposefully try not to deal with them ever again. Dealer licenses should be revoked for doing this, not endorsed and supported.
The fact that the dealership lobby is having to push for laws to protect their business means they are seeing the writing on the wall: the car dealership model will soon become just another (unpleasant) relic from the past.
Baby Boomers and GenX both like the idea of being sold something and having that service provided, but Millennials and GenZ have consistently shown that we greatly value self-service, straightforward pricing, and not wasting time or money on feeding the “fat” in systems.
Car dealerships are a major reason why new vehicles are so expensive now, with automobile pricing far outpacing inflation or any other metric.
In what other industry, not using the dealership model, would we be ok with major purchases being gate-kept by an army of middlemen who’s job is to grift off of every sale, obfuscating the price, are trained in deception, and their employer will also try to sell you financing, service place, and other crazy shit that people are not informed about? At least in retail you can shop around and find the best price and margins are well understood.
>>In what other industry, not using the dealership model, would we be ok with major purchases being gate-kept by an army of middlemen who’s job is to grift off of every sale
I see you have never tried to buy Enterprise Technology equipment, or Enterprise Software or really anything that is target at B2B sales
Consumer sales have less of this, but 90% B2B is network of middlemen gifting off sales with no way to go direct. hell I was on a call directly with the developer of a software product I wanted to buy, it was a low 4 figure deal, but it took several weeks to buy it because the deal had to go through some 3rd party company as they did not sell direct...
I would rather just added it to a cart online and bought it with my company credit card....
Self service on an EV is easy. There's so little to do that you can learn it all yourself. Change tires, inspect and lube brakes, check brake lines for water, change wiper blades, change cabin air filters. That's pretty much all you need for about 10 years when you'll have to replace the brake fluid and/or 200,000 miles when you'll change the brake pads.
Car dealerships should not exist. The fact they have a lobby trying to get laws passed to save them should be a very clear signal that they are in trouble.
Global car makers would love to sell directly. Again, why are there laws forbidding this if there was no intention by the manufacturers?
> the car dealership model will soon become just another (unpleasant) relic from the past.
The profitability of dealerships is in after-sale maintenance. Selling vehicles that require _less maintenance_ will hurt the profit model. To judge from the decision in Florida, dealerships must be owned by influential rich people there.
> Baby Boomers and GenX both like the idea of being sold something and having that service provided, but Millennials and GenZ have consistently shown that we greatly value self-service, straightforward pricing, and not wasting time or money on feeding the “fat” in systems
I don't think that seeing this economic model through the the distortion lense of generational marketing is a lucid explanation. Consumers don't like car dealerships and the sham business practices that they inflict on people.
People who understand the new breed of electric cars know their value. The demand for EVs is growing fast and manufacturers outside the US are responding to meet the demand.
The change is happening too fast for the profit model of US dealership owners.
Readit News
Talk about an unlevel playing field. If EVs are to be incentivized, direct sales should be allowed for all EVs from any manufacturer.
For legacy auto, the dealer network was a benefit (offloading local customer relationships, inventory, service) that is now an albatross they'll have to buy out. Just another combustion->EV transition disadvantage to incumbents (legacy auto dealers rely primarily on service revenue, and EVs require much less service overall). For example, GM had to buy out 150 Cadillac dealerships that did not want to pay for the costs involved to transition to EV products (~$200k/dealer). Ford is having problems with dealers drastically marking up their EV products with "market adjustment fees", discouraging uptake, and are attempting to twist dealership arms so they fall in line to compete against Tesla's no haggle pricing.
TLDR Interest alignment challenge.
https://www.autonews.com/dealers/car-dealer-automaker-tensio...
https://www.cnbc.com/2020/12/04/about-150-cadillac-dealers-t...
https://electrek.co/2022/09/14/ford-sets-new-dealers-require...
https://twitter.com/mrlevine/status/1373646122548301833
https://www.teslarati.com/ford-dealership-applies-69554-mark...
Auto Dealers at the state level it one of the most, if not most powerful groups in state politics, as a huge part of most state revenues are derived from taxes on Auto Sales. it is by far the most expensive item most people purchase that is subject to sale taxation
I am kinda surprised they allowed for a carve at all.
You can draw your own conclusions.
"Will no one rid me of these meddlesome dealerships?!"
2. Courted the right with access to social media
3. Profit!
Deleted Comment
https://advocacy.consumerreports.org/wp-content/uploads/2019...
Depending on the state, in some states you always save money Vs. gas tax, but in others unless you're in the top 10% or even top >5% of drivers by miles driven, you're likely paying more in EV fees than gas tax would cost. If you only drive your EV low distances, you're particularly negatively impacted.
There are some programs meant to help with fix this, but they involve putting a GPS tracker in your vehicle that both drains the battery and robs you of your privacy, so you're exchanging one problem for another.
PS - Many of these states also target Hybrids and Plug-In Hybrids with these fees and many of the problems listed above also impact them.
Dead Comment
If dealers won't sell at MSRP as good enough, it should be redefined as something that is beholden to only their greed, but not simply legitimized by dealers that feel entitled to get over on me adding to the legal price.
Dealerships are now akin to legalized scalping like StubHub and Ticketmaster adding superfluous charges and fees, and I will purposefully try not to deal with them ever again. Dealer licenses should be revoked for doing this, not endorsed and supported.
Deleted Comment
this feels like big Gov in intricate detail
Baby Boomers and GenX both like the idea of being sold something and having that service provided, but Millennials and GenZ have consistently shown that we greatly value self-service, straightforward pricing, and not wasting time or money on feeding the “fat” in systems.
Car dealerships are a major reason why new vehicles are so expensive now, with automobile pricing far outpacing inflation or any other metric.
In what other industry, not using the dealership model, would we be ok with major purchases being gate-kept by an army of middlemen who’s job is to grift off of every sale, obfuscating the price, are trained in deception, and their employer will also try to sell you financing, service place, and other crazy shit that people are not informed about? At least in retail you can shop around and find the best price and margins are well understood.
I see you have never tried to buy Enterprise Technology equipment, or Enterprise Software or really anything that is target at B2B sales
Consumer sales have less of this, but 90% B2B is network of middlemen gifting off sales with no way to go direct. hell I was on a call directly with the developer of a software product I wanted to buy, it was a low 4 figure deal, but it took several weeks to buy it because the deal had to go through some 3rd party company as they did not sell direct...
I would rather just added it to a cart online and bought it with my company credit card....
Car dealerships need their local customers, global car manufacturers don't.
Prepare yourself for a poop emoji if you try to complain.
Global car makers would love to sell directly. Again, why are there laws forbidding this if there was no intention by the manufacturers?
The profitability of dealerships is in after-sale maintenance. Selling vehicles that require _less maintenance_ will hurt the profit model. To judge from the decision in Florida, dealerships must be owned by influential rich people there.
> Baby Boomers and GenX both like the idea of being sold something and having that service provided, but Millennials and GenZ have consistently shown that we greatly value self-service, straightforward pricing, and not wasting time or money on feeding the “fat” in systems
I don't think that seeing this economic model through the the distortion lense of generational marketing is a lucid explanation. Consumers don't like car dealerships and the sham business practices that they inflict on people.
People who understand the new breed of electric cars know their value. The demand for EVs is growing fast and manufacturers outside the US are responding to meet the demand.
The change is happening too fast for the profit model of US dealership owners.