from the regulation-is-bad,-unless-it-helps-me dept
Undaunted by criticism of this practice in numerous states, Tesla says GM is now trying the same thing in Indiana. In a new letter sent to Tesla "owners and enthusiasts" in the state, Tesla warns that Indiana's HB1254 would once again try to ban direct-to-consumer auto sales in the state:
We need your help. Yesterday, the Indiana Senate Committee on Commerce & Technology held a hearing on a bill that would shut down Tesla in the state. Authored and pushed by General Motors, HB1254 with amendment 3 would prohibit any manufacturer from being able to hold a dealer license after December 31, 2017. Existing law allows ANY manufacturer to apply for a dealer license without the use of independent franchised dealers.In other words, it's another legacy company deriding regulation at every opportunity -- except when it protects it from having to actually compete. While Tesla tells Ars Technica that it has no direct proof GM authored the bill, as we've seen in telecom, legacy companies all but own many state legislatures. Legislatures that are happy to shovel forth any and every bill (usually middle manned by groups like ALEC to present the feeblest attempt at propriety) provided the price is right. Tesla notes that GM could mirror Tesla's direct to consumer sales model, but would rather erect new barriers to entry than actually compete.
Despite having a lawfully granted license to sell Tesla vehicles directly since 2014 at the Fashion Mall at Keystone; despite contributing over $42M to the state through the purchase of parts and components from Indiana suppliers; and despite plans underway to construct a 26,000 square foot Tesla Service facility that will employ approximately a dozen Indiana residents and serve our customers, GM is pushing the Senate Committee to shut out Tesla.
GM seems relatively unfazed by the fact that the FTC last year slapped Michigan for trying the same thing. Ask GM, of course, and the narrative changes dramatically. The legacy automaker tried to tell Ars that it's Tesla that's trying to craft special rules for itself, despite the fact that GM is the one pushing for the rule changes:
GM supports HB 1254. GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products. A benefit of a nationwide network of thousands of dealerships is that General Motors customers never have to worry about driving to another state to buy, service or support their vehicles.Of course that's crap, and GM is turning logic on its head. Tesla has been operating a showroom in the Fashion Mall storefront since December 2013. It's GM that could follow Tesla's lead (like some Seattle Honda and Toyota dealers) and push for direct-from-manufacturer sales, but would rather use our broken legislative process to protect the status quo franchise dealership system. This has been an ongoing headache for Tesla in states like New Jersey, Texas, Arizona and especially Virginia, where auto-industry laws prohibited the company from opening a simple showroom.
Tesla's insistence on special rules could result in multiple manufacturers competing with similarly capable vehicles and similar price points, yet operating under a different set of rules. Tesla could open a franchised dealership with an independent operator in Indiana today, but instead they insist that the State must first provide them with unique rules and special exceptions to suit their own business interests. In fact, Tesla was willing to agree to a dealer model in Virginia. The Indiana legislature shouldn't create a special exemption for them here.
Be it telecom or the auto industry, the fact that legacy industries can still write and buy anti-competitive state laws is a problem we simply refuse to fix.