Michigan governor signs legislation banning direct Tesla sales (insurance, vehicle, credit)
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I hope Tesla ends up on the winning side of these battles because I love their business model.
To sum it up, the Big 3 are terrified of Tesla because when the day comes where Tesla can build a mainstream $25-30,000 model with a 500 mile or better range, they'll be poised to clean the Big 3's clocks.
Their vehicles are very, very high quality, arguably even better than Toyota/Lexus. At the moment they aren't that great of a threat since maybe 5-10% of car buyers at most are looking at models that run $75,000+
The UAW doesn't like Tesla either since they don't have a unionized workforce, but from what I understand they don't need it. Tesla employees are paid very well I hear.
I think you're confused about which interests are fighting Tesla's entry into the retail market space. The Big Three aren't terrified of Tesla. They'd just as soon be rid of the franchise laws that are impeding Tesla's market entry because they also keep The Big Three (and every other manufacturer) from doing what Tesla wants to do: sell directly to the retail customer. Manufacturers largely consider franchise dealer networks to be a PITA and would love to be rid of them; or at least rid of the requirement to deal with them.
I think you're confused about which interests are fighting Tesla's entry into the retail market space. The Big Three aren't terrified of Tesla. They'd just as soon be rid of the franchise laws that are impeding Tesla's market entry because they also keep The Big Three (and every other manufacturer) from doing what Tesla wants to do: sell directly to the retail customer. Manufacturers largely consider franchise dealer networks to be a PITA and would love to be rid of them; or at least rid of the requirement to deal with them.
So it's really not the Big 3 per say that are against all this, but all the independent dealerships?
OK that makes sense, I can see how they don't like how Tesla cuts out the middle man.
You can still buy and own a Tesla if you live in Michigan.
You just can't buy it in Michigan. Call up Tesla in California and they will happily sell you one and ship it to your house. This law doesn't prevent you from buying a Tesla. It simply prevents Tesla from establishing their own dealer network. Michigan wants Tesla to sell its cars through independent dealers.
Ford doesn't own a single dealership. Neither does GM, or Chrysler, or Toyota.
This type of law is simply protectionist, anti-competition, and anti-consumer.
Lets be honest, though. Elon Musk is already panhandling people he knows for money to run the biz since his divorce. This is just a way for a floundering company that is only making a "profit" due to accounting tricks and other automakers giving them handouts to save on costs. So, a factory just ain't coming.
With that being said, he should just keep his operation small and not spread the company too thin at this point. Trying to spread into states that will require the company to operate a dealership just isn't worth the fight for Tesla.
The net income stood at -$50 million, or a loss of 40 cents a share.
Theres no such thing as an accounting trick to make a profit. Especially for a publically traded company. There are accounting adjustments that can be a "good guy" for your bottom line, but you cant just make these show up whenever you need. If a company isn't making enough in revenue, they also don't have the cash flow to be sustainable and no accounting adjustment can fix that.
The thing that makes Snyder such a **** is. he was more than happy to operate his business under as a manufacturer direct to customer model when he was Chairman of Gateway Computers, a manufacturer direct to customer company.
(Before anyone calls me out on that, yes, Gateway had brick & mortars, but it was late in the company history and by all accounts lead to huge losses)
If people were smart they would realize that these auto dealer lobbyists are driving up the cost of a car by thousands of dollars. It would be much easier and better for consumers if you could call Ford and order a mustang for 25k instead of 35k at the dealer. Unfortunately this involves people getting their heads out of their expletives and paying attention.
If people were smart they would realize that these auto dealer lobbyists are driving up the cost of a car by thousands of dollars. It would be much easier and better for consumers if you could call Ford and order a mustang for 25k instead of 35k at the dealer. Unfortunately this involves people getting their heads out of their expletives and paying attention.
Irrespective of what one thinks of franchise laws, you're nuts if you think there's anywhere near $10K worth of retail markup in a Mustang.
For most brands, dealers make next to nothing on their new car sales. The real money is in service, finance packages, and selling trade-ins. New car sales is just the catalyst that gets the rest of the process moving.
Maybe for high-end brands like Porsche or BMW. For your average mass-market brand... not even close.
This thread is about Teslas, not mass market brands.
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