In the latest chapter of an ongoing battle against traditional dealer networks, Tesla Motors Inc. Chief Executive Elon Musk has taken his fight to Texas, telling lawmakers his company could sell as many as 2,000 cars next year if allowed to open its own stores. Musk testified Monday before a committee of the Texas Legislature in support of HB 3351 and SB 1659, bills that would allow U.S.-based manufacturers of 100% electric- or battery-powered vehicles to sell directly to Texas consumers.
Apparently there are other states than Texas that prevent Tesla from selling cars. Texas is the biggest market that currently prevents Tesla from selling cars in its state.
Wouldn’t it be better for the consumer to buy a car directly from the maker and not have to pay middleman markup? No Texas regulation prevents Apple from selling directly to the customer. Nor oil companies having their own stations to sell gas directly to customers. Why cars?
I’ve bought cars directly from the maker and I have always had to go through a dealer, paying them a set fee for the deal. Can’t buy directly from the auto maker.
Yet if I want to buy a car directly from Volvo in Sweden, they will not only give me two tickets to fly there, they will pay for the hotel and ship it back to the US for free.
BMW has something similar. Buy the car for 7% off the manufacturers price. The discount pays for the trip, even if the tickets are not paid for. Get 14 days of driving in Europe. They ship it home. Similarly with Mercedes-Benz. Also Porshe and Audi.
So we can end up with a two week European vacation and a new car for what we have to pay for a new car here in the US. Because we have to work through dealers.
Why should I have to pay a dealer a fee here when I can get a trip to Europe and a new car for the same price? These car companies would not be doing all that if it was a money loser for them. In fact, it would seem that they could sel directly here and mark the price down rather than have us come all the way to Europe for the deal. But regulations prevent them.
Middle men are being required by the regulations.
That is what the exponential economy does – it shortens the distance between customer and corporation. Yet here we have people trying to hold onto a failing business model, much like we see music companies trying to hold onto their outrageous profits, or movie companies or book companies or universities or cable or TV or just about anything impacted by the declining curve of the exponential economy.
They cannot compete in the market place, so they then retreat to government regulations. Regulations that level the playing field by making all businesses follow the rules in order to benefit customers is one thing. Regulations that help certain businesses to the detriment of other businesses and the customers is an entirely different case.
Maybe Tesla should follow the same model as the European companies and fly customers out to California, give them a two week vacation and deliver the cars to the state. Would that violate any regulations?