FTC Officials Condeming Laws That Ban Automakers From Selling Directly To Consumers

This will cause price fixing and price gouging to go out of control. This is anti-comsumerist beyond belief.

I don't understand how this is anti-consumerist. Currently, car manufacturers already builds in a profit margin when they deliver vehicles to dealers. The dealer then adds on their profit margin. If auto manufacturer cut out the dealer, there's only one profit margin instead of two.

@SSP350 then let me enlighten you so you will not need to go to your community college and take Economics 101. Tesla wants to sell factory direct to consumers and what that does is guarantee that there is ZERO competition in the market. Zero competition means price fixing and price gouging. A buyer will not be able to negotiate with multiple dealers for the best purchase price and that is blatantly anti-consumer. Moreover, whatever Tesla says is the price is the one that the consumer has to pay another anti-consumer move. Goodbye free market! Goodbye letting the consumer have power and choice!

The reason Tesla wants to do this is most decidedly NOT to make the buying experience better for consumers but rather to do two things (1) keep the transaction price high for its own profits and (2) keep from having to share profit with a dealer. Your illustration about how this cuts one profit margin is NOT even remotely sensical and beyond that it is laughably jejune. The reverse is true. Tesla wants its profit PLUS the profit that would go to a dealer. That is greed but that is Elon Musk 100%. The list price of cars sold in the free market system you so seem to hate has profit built in for the dealer and the manufacturer. Tesla wants to grab both.

The Moroney sticker price is derived by adding manufacturer invoice plus profit to make the dealer invoice plus an allowance for dealer profit. The dealer can negotiate sales price by wiggling on its profit. Manufacturer rebates and incentives come mostly out of THEIR chunk of profit in the car. But make no mistake, the manufacturer gets its profit into every car. Tesla just wants to be nakedly greedy about their money grabbing.

Your thought, idea or statement that the Tesla price will also include a margin of profit for a phantom dealer that they will keep, is just not accurate. The dealer system adds tremendous cost to the sale of an automobile. Those cost need to be recoup and a profit made that dealer's investment. Without these costs, Tesla will be able to bring an auto to market more efficiently and competitively than other manufacturers in the dealer system. It's a fact that other manufacturers will soon follow Tesla's lead. You are probably one of the people who never envisioned an amazon.com taking place of many brick and mortar retailers, but that is the trend.

It will be interesting to see how this shakes out. I disagree with the statement that being able to sell direct form the factory will guarantee zero competition. It is the car we are buying, not the dealer or middle man. When buying a Tesla, you will have to come to terms with the fact that the normal bartering process won't work and you will have to decide whether the price as offered is a fair price or not. If it not, then there are plenty of other good cars to choose from. Competition is in the form of having numerous car choices and not the sales channel. Economics 101 really says that if you sell a good product at a fair price in a free market you will be successful. You should be more concerned about all of the federal money and tax breaks Musk is banking away, this does not level the playing field.

@Terry989...you need Econ 101! If the manufacturer controls the flow of the product, it controls the price. if it controls the price the consumer is sphincter raped. Musk is an opportunist.

Wow! What are you talking about!????
Tesla sells car for eg. 74,500. You buy for 74,500.
Dealer gets car (worth 74,500) and place their margin of cost -> car now worth 81,500. -> you get best price for under 81,500, lets say 79,000 because you thought you were a smooth talker. Now you're a happy customer because you had the opportunity to get the best available price???
This is what you are all protecting? IDIOTS!
NO DEALER WILL SELL FOR UNDER OR CLOSE TO 74,500!! EVER. Only the manufacturer. - Listen to SSP350, smart.

Matt - - -
- You are about as opinionated as the come
- You claim to be a dealer
- You claim to know economics better than the rest of us

You really expected us to believe you are providing a fair assessment of this?

@Terry989 I am not a part of a Tesla franchise nor could you pay me to be. I am also not a dealer. I am a partner with a group of other men who have financial interests in dealers. I am privy to the business meetings because I sit in on them, but I do not sell new cars to customers. I sell vintage flipped and restored cars to people yes, but not new. I am also a pragmatist and not someone who wears rose colored glasses and speaks in "should this should that" and a businessman has to be that way or you go out of business. I know how a Moroney sticker is built and I know that there are two profit strings in it.

The reality is that a company store is all about price fixing pure and simple. It is also about keeping more profit for the manufacturer. The huge advantage of the dealer system--for consumers--is that we have to compete with each other and the consumer gets a better deal and usually well below list.

Wow MattDarringer.

While we're at it, we should also ask the FTC to ban Apple stores, most apparel retailers, Starbucks, and pretty much everything else you can think of.

Especially Gap, because clearly when I pay $4.99 for a t-shirt for my toddler when they put it on sale, it's still a 1,000x markup and no "sale" indeed.