Why You Can't Buy a Tesla in These 6 States
By Daniel Gatti
The state of Connecticut is a progressive state, with a strong track record of support for laws and policies that will reduce global warming emissions and a goal of putting more than 150,000 electric vehicles (EV) on the road by 2025.
Given the policy commitments of the state of Connecticut, one might assume that Connecticut would be a place that would welcome an innovative, important business like Tesla, the largest manufacturer of electric vehicles in the U.S. And given the significant fiscal challenges that Connecticut faces, one might think that Connecticut would be excited to see Tesla operate new stores within the state, bringing jobs and tax revenue.
But in fact, Tesla is legally prohibited from operating its Tesla stores in Connecticut.
Ready to Buy an EV? Here's How to Save Big https://t.co/COyEwo8GUn @EcoWatch @sierraclub #gogreen #savemoney #electricvehicle #ecofriendly— PlugShare (@PlugShare)1482349116.0
Under Connecticut's dealer franchise law and under the law of many states throughout the country, automobiles may only be purchased through independent car dealerships. Tesla's cars are sold directly from the manufacturer, which mean that Tesla stores are not welcome in Connecticut.
The problems that Tesla has faced with automotive dealers and state dealer franchise laws represent a combination of unintended consequences, special interest influence and the challenges of developing new technologies in marketplaces dominated by entrenched interests and outdated laws. The Tesla wars are also a part of a broader story of how changes in technology are impacting laws and regulations governing transportation in the U.S.
Why Do We Have Dealer Franchise Laws?
The car dealership model as we know it today arose in the 1920s and 1930s, as first General Motors and then eventually all of the "Big Three" American automakers chose to license the rights to sell their cars to independent dealers, rather than selling the cars directly to consumers.
The independent dealership model worked because it allowed both parties to focus on core competencies: The manufacturers could focus on making the best cars possible, while independent dealers made the inroads into local communities that allowed them to most efficiently sell the cars directly to consumers.
From the beginning, one challenge in the independent dealership model is the obvious power imbalance between the "Big Three" automakers who dominated automobile manufacturing and the thousands of independent dealerships that were licensed to sell their vehicles. Stories abounded of auto manufacturers exploiting their superior market position to gain unfair advantages on independent dealers. For example, manufacturers could force independent dealers to purchase cars that they didn't want as a condition of maintaining their relationship or terminate the franchise relationship at will without cause or coerce profitable dealerships into selling their business at below-market rates.
Beginning in the 1930s and accelerating greatly in the 1950s, legislatures in all 50 states passed a series of laws, known collectively as dealer franchise laws, which were intended to protect independent dealers from abusive practices at the hands of vehicle manufacturers. Among other things, these laws prohibited the "Big Three" from owning licensed dealerships themselves or selling cars directly to consumers.
The prohibition on direct manufacturer sales was intended to protect independent auto dealers from unfair competition from their own manufacturers. The classic concern addressed by the ban on direct sales from manufacturers is the independent car dealer who spends money, time and effort building a market for, say, Ford vehicles in a certain town, only to have Ford Motor company jump in and open up a rival direct from manufacturer store that undercuts the independent dealer on price and takes his market share.
By the 1950s when most of these laws were passed, the independent dealer model was so entrenched in the American car market that it was simply presumed that all auto manufacturers would have independent dealerships selling their cars and that any direct manufacturer sales would necessarily be in competition with an independent dealership. Dealer franchise laws therefore did not contemplate the challenge posed by a company like Tesla, a company that refuses to sell its cars to independent dealerships at all and instead insists that all sales must be direct from the manufacturer itself.
Why Doesn't Tesla Distribute Through Franchised Dealers?
Tesla has adopted this policy because they believe that the traditional independent dealership model does not work for electric vehicles.
According to Tesla CEO Elon Musk:
"Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business. This would leave the electric car without a fair opportunity to make its case to an unfamiliar public."
Tesla points to the failure of Fisker and Coda as examples of electric vehicle start-up companies that failed because of their reliance on independent dealerships to sell a new technology. In addition, Tesla argues that because electric vehicles have lower maintenance costs than traditional cars, independent dealerships that make money off of service will always have an incentive to steer consumers away from electric vehicles. Tesla offers service for all of their vehicles for free.
Recent studies confirm that, with a few exceptions, most auto dealers in the Northeast are not making enough of an effort to sell electric vehicles. Between January and June of 2016, dealers in the Bridgeport to New York City metro area had 90 percent fewer EVs listed for sale than Oakland, when adjusted for relative car ownership. A recent report by the Sierra Club found that Tesla stores provide EV customers with far superior service, as Tesla was more likely to have EVs available to test drive, more likely to be knowledgeable about state and local incentives and more likely to be able to correctly answer technical questions about charging EVs, than traditional car dealerships.
A Tesla store looks and feels more like an Apple store than a car dealership. They are placed in high volume, high traffic areas such as shopping malls. They have almost no inventory, as Tesla cars must be ordered individually from the manufacturer rather than sold on site. There is no haggling over price. And Tesla stores sell only Tesla products, including cars and batteries; with the recent merger with SolarCity, Tesla stores will soon sell solar panels as well.
.@TeslaMotors, @solarcity Merger Approved by Shareholders via @EcoWatch https://t.co/btg68Na58g @elonmusk #tesla @NRDC @ClimateReality— EcoWatch (@EcoWatch)1479482535.0
Why Do Some States Allow Tesla Stores and Others Do Not?
Over the past few years, courts and legislatures across the country have struggled with the question of whether and how to apply dealer franchise laws to Tesla stores. Some state courts, including Massachusetts and New York, have found that dealer franchise laws are only intended to apply to manufacturers that have licensed independent dealers and do not provide a cause of action against Tesla stores. Other states, including New Hampshire and Maryland, have recently changed its law to permit Tesla stores through legislation.
States that currently ban Tesla stores include Texas, West Virginia, Utah and Arizona, in addition to Connecticut. Some states, including Virginia and Indiana, allow a limited number of Tesla stores. New Jersey proposed a regulation that would have banned Tesla stores in 2015, but then relented last year, amending the regulation to allow four stores in New Jersey.
Often the difference between a jurisdiction that permits Tesla stores and a jurisdiction that bans Tesla stores comes down to minute differences in statutory language. For example, until 2014 Michigan's dealer franchise law prohibited auto manufacturers from "[selling] any new motor vehicle directly to a retail customer other than through its franchised dealer."
The word "its" in the statute arguably suggests that the law only applies to manufacturers that have franchised dealers and thus does not prohibit Tesla stores. But then a legislator allied to the auto industry slipped a provision into an unrelated piece of legislation removing the word "its" from the statute and just like that, Tesla stores were banned in Michigan.
Beyond narrow questions of statutory interpretation, judges and legislators wrestling with these questions need to consider the purpose of dealer franchise laws. Are these laws meant to regulate a relationship that arose within the context of the independent dealer system? Or are these laws intended to mandate that the independent dealer system must be the only way automobiles are sold in the U.S. forever? If it is the latter, then the dealer franchise laws represent not only a ban on Tesla, but a ban on all innovation in distribution methods.
Can such a ban be justified?
By Governor Jay Inslee
Climate Week this year coincides with clear skies in Washington state for the first time in almost two weeks.
In just a few days in early September, Washington state saw enough acres burned – more than 600,000 – to reach our second-worst fire season on record. Our worst fire season came only five years ago. Wildfires aren't new to the west, but their scope and danger today is unlike anything firefighters have seen. People up and down the West Coast – young and old, in rural areas and in cities – were choking on smoke for days on end, trapped in their homes.
Fires like these are becoming the norm, not the exception.
EcoWatch Daily Newsletter
By Bill McKibben
To understand the planetary importance of this autumn's presidential election, check the calendar. Voting ends on November 3—and by a fluke of timing, on the morning of November 4 the United States is scheduled to pull out of the Paris Agreement.
President Trump announced that we would abrogate our Paris commitments during a Rose Garden speech in 2017. But under the terms of the accords, it takes three years to formalize the withdrawal. So on Election Day it won't be just Americans watching: The people of the world will see whether the country that has poured more carbon into the atmosphere than any other over the course of history will become the only country that refuses to cooperate in the one international effort to do something about the climate crisis.
By Oliver Milman
The climate crisis is set to be a significant factor in a U.S. presidential election for the first time, with new polling showing a clear majority of American voters want decisive action to deal with the threats posed by global heating.
Do you support or oppose each of the following policies as part of the recovery from the coronavirus pandemic?<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQzODcyMC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYxNjg4MzY4OX0.B-bt9mltOhK0MHFbzK8G3_8sBkDAeUsAWm-AhNZYoxQ/img.png?width=980" id="acd43" class="rm-shortcode" data-rm-shortcode-id="8724178274b9f96e27055f74a1bafe20" data-rm-shortcode-name="rebelmouse-image" />
America's largest national forest, Tongass National Forest in Alaska, will be opened up to logging and road construction after the Trump administration finalizes its plans to open up the forest on Friday, according to The New York Times.
Aerial view of the Tongass National Forest. Alan Wu / Flickr / CC BY-SA 2.0
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By Ruby Russell and Ajit Niranjan
Hamstrung by coronavirus lockdowns, frustrated school strikers have spent months staging digital protests against world leaders failing to act urgently on climate change.
Pandemic Stalls Protests<p>Last November, the head of the UN Environment Program was among the public and scientific figures to warn that 2020 offered a last chance to cut emissions. Then, few could have suspected this deadline would coincide with an unprecedented public health emergency.</p><p>The pandemic has <a href="https://www.dw.com/en/tough-times-ahead-for-climate-protesters-during-corona-pandemic/a-52978469" target="_blank">dealt climate activism a blow</a>. Niedeggen says that as a movement demanding that the world act on scientific advice, the school strikers took lockdown restrictions extremely seriously, halted public protests immediately and took their activism online.</p><p>On April 24, Fridays for Future organized a "digital strike," with Niedeggen hosting a that racked up close to a quarter of a million views. "We were not physically standing together, but we were all fighting together," she says.</p><p><a href="https://www.dw.com/en/climate-strikers-get-inventive-during-the-covid-19-crisis-fridays-for-future/a-53229262" target="_blank" rel="noopener noreferrer">Activists also gathered thousands of placards</a> from across Germany to lay out in front of the German Bundestag around the central slogan: "Fight every crisis."</p>
Opportunity for a New Normal<p>Last September's Global Climate Strike drew young and old protestors around the world, with organizers estimating a global turnout of 7.6 million, including an estimated 270,000 people in Berlin. Activists have adjusted this year's event to account for social distancing and different levels of coronavirus restrictions in cities taking part.</p><p>They say COVID-19 also presents opportunities.</p><p>"The pandemic shows that we can change our normal daily life, and we are very able to adjust to a situation of crisis," she says. The key question is how economies get back on their feet: "We have the possibility to build a new normal, to build a renewable world order, and an environmentally just, climate-just normal for everybody."</p><p>In July, Jeng was among 20 female Fridays for Future activists from the Global South to sign an open letter to G20 finance ministers warning that their decisions in "exclusive backrooms" over stimulus packages and corporate bailouts would "lock in development pathways for decades."</p><p>"The system is not broken, it was built to be unjust. We don't need recovery, we need a reboot," the letter reads, stressing that "black people, indigenous peoples and people of color," have been disproportionately hit by the economic, climate and coronavirus crises. </p>
Policy 'Not Quite There Yet'<p>Figures on stimulus spending do not suggest their words had much impact. The ministers were criticized for failing to relieve the debt of poorer countries, and according to <a href="https://www.energypolicytracker.org/region/g20/" target="_blank" rel="noopener noreferrer">Energy Policy Tracker</a>, G20 countries by August had pledged $169 billion (142 billion euros) to fossil fuels since the beginning of the pandemic.</p><p>Katrin Uba, associate professor of political science at Uppsala University in Sweden, is researching Fridays for Future. She says that despite the movement raising awareness and gaining access to policymakers, real policy change "is not there yet."</p><p>Still, she stresses that social movements go through waves of mobilization as public attention on their core issues ebbs and flows. And perhaps one of Fridays for Future's biggest achievements is birthing a politically active generation that will keep the fight up long after corona becomes a memory. </p><p>"We know clearly from our research that many of the people who came to the streets hadn't done any protesting before in their lives," she told DW. "And we also know that if you do one protest, you are likely to do more."</p>
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