Lawmakers in New York state are moving to shut down Elon Musk’s Tesla dealerships in yet another blow to the billionaire CEO.
New York State Sen. Patricia Fahy and other lawmakers are fighting to remove a waiver that allows Tesla to operate five in-person dealerships in New York, instead forcing the company to sell their vehicles through dealer franchises, The New York Times reported Sunday.
“No matter what we do, we’ve got to take this from Elon Musk,” Fahy said in March when she first introduced the bill against Tesla. “He’s part of an effort to go backwards.”
She wants the company to relinquish its 5 licenses and instead distribute them to other EV manufacturers, such as Rivian, Scout Motors, and Lucid.
The entire dealership model is stupidly outdated. They add no value, and if they truly did, remove the law mandating it and let the market sort itself out.
Car salespeople at these dealerships are the prime example of leeches.
Yeah, even here in Europe most places that sell cars gave up their dealerships.
It’s a shitty business model that makes no sense for the owner.
I’m not sure I understand the idea behind dealership? Isn’t like a shop where you can buy different brands?
No. New car dealers are per brand: Honda, Toyota, Ford… etc.
A dealership (or that’s how it works here) is obligated to sell x amount of cars (usually same brand or at least same group). They will just be sent the cars whether they sell them or not. So in a worst case scenario the franchise ends up with shitty cars no one wants and has to dump them on the market for shit prices.
The result is often that cost of maintaining a vehicle at a dealership is through the roof because they don’t have a healthy margin on new cars (or even lose money on them).
They also have very idiotic requirements at times to even become a dealer. Although supposedly they have loosened requirements and rules since no one wanted to be a dealership anymore here.