Cars and Disruptive Technologies

September 2, 2014 17:00 pm

by Eric The Younger · 22 comments

Disruptive technologies are, well, disruptive. We’ve seen this throughout history with the written word followed by the printing press and then the internet.  Jeff Jarvis even wrote a long essay, turned Kindle single, about the disruptive nature of the printing press. Switch to automobiles and fast forward a few hundred years from Guttenberg to Elon Musk and we are seeing similar reactions.

Tesla Motors uses a different way to sell their cars. Instead of dealerships, it’s more like going to the Apple Store. And this is what the Georgia Automobile Dealers Association is taking issue with. From Auto News

In its petition, the Georgia dealers association is asking state regulators to prohibit Tesla from selling its vehicles, revoke the company’s existing dealer license and deny any attempt by Tesla to renew or reapply for a license.

The association suggests that Tesla improperly obtained the license by claiming that it qualified for a statutory exception allowing direct sales for makers of custom vehicles selling less than 150 a year.

Tesla does not qualify for the exception, the association argues, because it does not manufacture to custom design specifications and it is already selling more than 150 vehicles in Georgia a year.

Georgia is one of the fastest growing and largest markets for electric vehicles and Tesla has shaken the status quo by using direct sales.

Should Georgia law change and this really is just a buggy-whip argument or does the Auto Dealer’s Association have a point?

 

{ 22 comments… read them below or add one }

Noway September 2, 2014 at 5:10 pm

Auto dealers’ “gotta get their cut…” No cutting out the bloated middleman don’t ya know! “Prohibit them from selling…”? So, let’s get the gubmint to restrain trade? Seriously? Go eff yourself. As long as Tesla customers feel they can get their cars serviced in a satisfactory manner buying them in this way, then the auto lobby/industry can go pound sand!

Charlie September 2, 2014 at 5:14 pm

I expect as much thoughtful commentary on this subject as we normally see on our Uber threads.

Hey! I love something that’s new! Thus “what I like” = free market, and everyone else that’s currently invested in a business are evil people that should apologize for being taxpaying employers!

I’ll hope that I’m wrong and circle back later to check to see if some of our commenting community can see the shades of gray on both sides of this issue.

Lea Thrace September 2, 2014 at 5:23 pm

Nah. You know this place too well.

Baker September 2, 2014 at 7:52 pm

I generally am somewhat of a Luddite and despise new/shiny, but I fail to see much on the dealer side here Charlie. I don’t think car dealers are evil but I don’t see why Tesla should be forced to go through them to sell cars. Or why there should be a law that restricts Tesla sales to under 1500 cars?

gcp September 2, 2014 at 5:22 pm

The Ga. legislature should try a little free enterprise: let Tesla sell as many cars as they want with or w/o in state dealerships, tax the sale whether its an on- line or in-person transaction and remove the ridiculous $5000 tax credit on electric cars. Now if only we can get car dealers such as Sen. Butch Miller to agree maybe we can get these changes.

Noway September 2, 2014 at 5:27 pm

Uber is here to stay. Amazon is here to stay. Buying direct is here to stay. Those that don’t operate in that manner or adjust their business model to figure out a way to continue to make a living will go by the way of the Triceratops. Then the fairness/guilt card will be played, ala the Mom and Pop stores who get beaten by Walmart. Same record, different tune…

Noway September 2, 2014 at 5:32 pm

I’ve purchased my last two cars via CarsDirect.com. Much lower prices that just going to the salesman in the dealership. Now, in addition to CarsDirect, we see commercials for TrueCar.com. Similar purchase process, lower prices to those who know to use them. Times are changing.

Noway September 2, 2014 at 5:37 pm

Ahhhh, I’m callin’ the Po-leece to go shut down that kid’s lemonade stand! No business license, no visit from health inspectors!!! We gots to be protected by the omnipotent and omnipresent gubmint regulators!!! Maybe those same dillweeds from Gainesville can sponsor legislation to curb this like they did for the tag on your four year old daughter’s bicycle!

Charlie September 2, 2014 at 5:41 pm

You’re having a conversation with yourself. Is this the only way you can talk to someone on your level?

Noway September 2, 2014 at 5:56 pm

Just posting thoughts, Charlie. My level? Really? LOL! I venture to guess most folks feel the same way about government potentially telling people what and how they can and cannot buy. You obviously disagree with my opinion. Just come out and say why you favor gov’t intervention and leave the insults out of it. You’re always wayyyy better than that.

Lea Thrace September 2, 2014 at 6:03 pm

I think he’s trying to tell you that you should pool your thoughts into one comment. And possibly make use of the reply button when possible. Makes for better dialogue.

Otherwise it really does look like a one man conversation is occurring.

Noway September 2, 2014 at 6:07 pm

Well, thanks for coming in and adding to my rambling dialog with myself, Lea. Makes me look more sane.

joe September 2, 2014 at 10:29 pm

more sane? not really

Lowered Expectations September 2, 2014 at 7:27 pm

So… a few questions:

1) Will Tesla service its own vehicles, or does it have to go to a Tesla mechanic? Most dealerships profit from maintenence more so than the sale of a vehicle.

2) What does the secondary market look like for these cars?

3) I’m not really sure what other function a dealership serves.

HueyMahl September 2, 2014 at 10:33 pm

They support the Scream At You On TV advertising agencies for the weekly “once-a-year” sales.

Seriously, the dealers are an anachronism dating back to depression era politics. Pure middlemen in todays market, providing no real value and extracting their toll through the legal system.

Harry September 2, 2014 at 8:06 pm

There are very few true libertarians in this world. Let’s restrict your right to purchase a car or use Uber in an unrestricted market, but don’t restrict my right to murder a baby or receive government benefits for homosexuality.

RoswellGal September 3, 2014 at 8:51 am

You gotta love it when Conservatives (and you don’t get more Conservative than Bill Morie) want to throw the free market out of the (car) window when it interferes with their profit.

Will Durant September 3, 2014 at 10:48 am

The Georgia Automobile Dealer’s Association has a well oiled lobbying machine already in place. Remember they got the legislature to “eliminate the birthday tax” and therefore created a new tax for the 65% of us who were utilizing private sales. Georgia’s consumers do not have lobbyists so how do think this will go?

Dave Bearse September 4, 2014 at 10:33 pm

Eliminating the ad valorem tax wasn’t enough because a sales tax was a problem for hack salesman / shady dealerships (perhaps the only group less respected by Americans than the US Congress) in selling vehicles to poor credit risks with the vehicles thus much more likely to be repo’ed.

So the tax for such vehicles was reduced in short order, natch. And who says we don’t have the best General Assembly that money can buy.

Baker September 5, 2014 at 10:49 am

Still waiting on someone to explain a shred of substance coming from the dealers side on this.

Charlie September 5, 2014 at 10:54 am

Check back at 11:30, or tune in to WGST at noon.

griftdrift September 5, 2014 at 10:57 am

Amazing how people don’t care about highly regulated industries until those industries suddenly provide something they want. Black town cars. Fancy electric cars. Then suddenly the free market must be let loose!