Tesla loses its battle to sell directly in Texas

COnservatives/regressives are behind this, aren't they? I mean, who else would be stupid enough to want to prevent a car company from selling......cars?

I say this - as a political neutral, if you will - that it is rather ironic that the conservative, supposedly pro-business states are blocking direct business and protecting associations (unions by another name).

ive been giving the American car dealership network a lot of thought lately due to the Tesla fiasco. after much thought i feel as though dealerships are necessary to drive competition to keep prices low. the reason why i say this is because how many ppl do you know that drive a Camry or an Accord that swear by it and only it. most ppl i know feel this way about the cars that they like. for instance, if i were a customer that only wanted a Camry and there was no dealership network, what would drive the price lower than the retail price? nothing.

The dealer network allows for more localized sales practices and an ability to cultivate a consumer relationship with a point person (dealer) that has a stake in the sales process. It also allows a car company to have a national distribution network without the need to lay out their own cash to buy real estate and build facilities. Dealers often put up a lot of personal money and assets to become a franchisee.

My feeling is that what Tesla is trying to do should be legal. I am not a supporter of regulating enterprise excessively.

But I also think Tesla is underestimating the value of the dealer concept. Musk, in an effort to stay in master control of everything, is going to end up spending a lot more company money building a dealer network himself. And running that network will be intensive also. It will be interesting to see how it all works out as it certainly is a new model for selling new cars.

i agree with you to some degree. i feel as though Tesla wouldnt directly be hurting anyone by being a manufacturer that can sell cars directly but if they are allowed, then all manufacturers can do this. if Tesla has the resources to start their own network, im sure VW and Toyota and GM can as well. as a result, wouldnt this be the end of all independent dealerships as we know it?

NeoReaper-- I guess it would be a threat to the franchise concept, but there are franchise agreements currently in place that would prevent the other car manufacturers from doing this. Plus, even if the other car manufacturers were able to jump on this trend, I am not sure they would even want to.

It would be very capital intensive for the larger auto companies to buy out every dealership, including land and facilties, and then add all the dealer employees to the payroll. It just doesn't sound very desirable. Nor does it sounds very possible.

Tesla is small right now and is clearly thinking differently. I'm just saying I think Musk is underestimating the costs to building out and maintaining a national dealer network, if he wants to reach sales currently implied by the stock price. I also think he undervalues the capital benefits of using franchising to grow distribution.

true, true. what ur saying makes a lot of sense. i guess my worry would be when those agreements expire. call it FUD but the slow elimination of independent dealerships would leave a person with no choice but to buy a product directly from the manufacturer. this in turn would mean that ur always stuck paying full retail prices, something i would like avoid at all costs. of course this is only a "what if" scenario.

Dealerships add to the cost of each vehicle you buy.