Tesla Challenging Dealer Franchise Laws, and Winning

2012-Tesla-Model-S

The American dealer franchise system might be on its last tank of fuel.

Since the advent of the mass production of cars, their sales have been filtered through a system of dealerships not affiliated with the carmakers. By acting as the middleman between the factory and the consumer, the dealer is free to negotiate and attempt to maximize profits. The downside for consumers, of course, is that uneducated people can be taken advantage of and charged more than necessary. The upside is that car buyers have local sales people and reliable service.

Tesla wants to change things up by selling directly to consumers in a retail model that could, and probably will, revolutionize how we buy cars.

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Who Would Be Better Off If GM Bought Tesla?

Model_S

Can you imagine a Buick Model S, a Cadillac Model X, or maybe a Chevy Roadster?

A mashup between General Motors and Tesla might seem far-fetched, but at least one analyst of the automotive industry thinks a GM purchase of the electric automaker not only makes sense, but could happen in 2014.

If such a transaction did take place, the possibilities are intriguing to say the least. Would GM keep the brand and run Tesla just as another arm in its empire, or would it simply use the technology in its existing brands and kill off the Tesla brand?

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Tesla Could Change How Cars Are Sold

Tesla Model S

The dealer franchise system has worked for selling cars in the United States for nearly as long as there have been cars in the United States.

By requiring new vehicles to be sold through private dealers not associated with the automakers, the market has been able to determine fair prices based on the MSRP. That’s been mostly good for consumers, at least the ones educated enough to research and negotiate a fair price.

It’s also allowed dealers to make gobs of money by acting as the middlemen between automakers and consumers.

Tesla thinks that model should change.

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Here Comes the Tesla Supercharger Network

Tesla Supercharger fast-charging system for electric cars

“Tesla needed to solve the problem of long-distance travel and we can’t wait for others to agree with our strategy. If we wait for some sort of consensus, it’s going to take too long. We just need to get going and other manufacturers can either copy us or join us.”

In the world of high-powered auto executives, you can probably guess that quote comes from the guy who also owns a company that builds spaceships. Elon Musk, CEO of Tesla, founder of PayPal, and owner of SpaceX, isn’t a guy to wait around and hope technology adapts to his product. No, Musk would rather adapt and invent technology to support his product.

In this case, the technology seems simple on the surface: recharging the electric vehicles that Tesla builds.

The problem is a current lack of North American infrastructure to provide a network that could support a cross-country trip. But why wait for that infrastructure, when you can just build your own?

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Tesla Announces “World’s Best” Warranty

Tesla Model S

A lot of people in advertising seem to think they can add instant credibility to their marketing message by adding a superlative or two to the copy.

Calling a product or service the “best” or the “biggest” or the “most” is pretty common practice, but this rarely means anything, since such labels are typically subjective marketing speak and used everywhere, all the time.

Tesla Motors posted a piece on its blog Friday announcing the “World’s Best Service and Warranty Program.” Well, that’s a mighty bold statement to make, but then again, Tesla is a pretty bold company and tends to back up what it says.

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Tesla Goes Its Own Way, Debuts New Lease Program

Tesla Model S

Tesla hasn’t done much that’s conventional in the car business. Just being successful as an independent U.S. automaker is unconventional enough, but the feisty maker of sexy electric cars has shunned the traditional dealer network and, now, debuted a whole new way to finance a Model S.

Well, mostly new. It’s essentially a lease. And a purchase, but with all kinds of asterisks and “true cost of ownership” numbers involved. But is the new financing program truly revolutionary, as Tesla CEO Elon Musk has suggested?

Well, yeah, the idea actually is. Don’t expect to drive a new Tesla for dirt cheap (not even close), but Tesla’s new financing plan should pique the interest of more than a few potential buyers.

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Musk vs. The New York Times: The Tesla Showdown!

2013 Tesla Model S

I don’t know why people continue to be surprised that electric cars have range limits. My 8-year-old daughter has an electric scooter and loves it, but knows it’ll die out somewhere around the 25th time down her long driveway and she’ll end up pushing it back to the garage. It doesn’t make her angry or surprise her, it’s just expected. Meanwhile, my son knows his gas-powered go-kart will run until the tank goes dry. Similar concept, different fuel. One can be refueled in about 30 seconds, while the other takes all night.

These are kids’ toys, and there’s no mystery involved.

Yet auto writers seem to love it when their test EV runs out of juice somewhere along a pre-determined test route designed to push the limits of range. Why? Because it gives them something to rant about. They can say things like, “Aha! This car left me stranded!”

That makes for a much more interesting story than reporting that a car finished a test loop without issue.

By now most people on Earth probably know about the New York Times writer and his adventures with a Tesla Model S, as well as Tesla CEO Elon Musk’s fiery reply. Come on guys, let’s just hug this thing out.

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Super Bowl’s Over, Let’s Move On

Chevrolet Corvette

Congratulations to the Ravens and Baltimore fans everywhere!

While the game was electrifying, I thought the advertisements overall were severely lacking in energy this year. It’s like the power went out on all of them even before the Superdome went dark. My favorite car ad was the Audi prom spot. The Chrysler/Ram Paul Harvey spot almost made me throw up in my mouth a little bit. The others were just mediocre.

With that out of the way, let’s get back to cars rather than the outlandish, extravagant attempts to sell them. Yes, we need vehicles to serve the mundane and much-needed transportation services of daily life, and I find irony in the fact that we often buy them based on some perceived emotion or extreme experience marketing people promise they will provide.

True car enthusiasts can look past overly produced TV commercials and buy based on other, more meaningful, factors.

One of those factors might be the car’s future collector value. Make it affordable and fun to drive as well, and the deal closes itself! What 2013 cars could be future collectibles?

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Cars Coming Soon: A Silent But Raging Return for Toyota Performance

Toyota Supra

The next Toyota Supra?

You might want to begin thanking everyone who bought a new Scion FR-S.

Because of the success of Toyota’s new little sports car, the company is considering bringing back the vaunted MR2 and Supra names. Yes, these rumors have been floated before, but now that Toyota has confirmed the public’s thirst for its performance offerings, there will probably be more on the way.

This possibility was mentioned in yesterday’s Car of the Year post, but since then a little more info has surfaced. Not all of it good.

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Could Tesla Sell Cars Like Apple Sells iPads?

Tesla's L.A. store

Tesla Motors has already succeeded at what many considered an impossible feat: starting a new car company in the United States. Tesla has redefined what’s possible, played by its own rules and created a company currently in production on its second model, with more on the way.

It didn’t get there by bending to expectations of failure or going down the same path trudged by so many others.

Now that the company is seeing success, another group has its sights set on forcing it to play by the pre-established rules. This time, not in how the cars are made, but how (and where) they are sold.

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