By on January 20, 2016

General Motors CEO Barra and Batey President of GM North America pose next to the Chevrolet Bolt EV electric concept car after it was unveiled during the first press preview day of the North American International Auto Show in Detroit

At a one-day workshop Tuesday sponsored by the Federal Trade Commission to discuss the future of automobile dealers in the U.S., executives from General Motors and Tesla jabbed at each other over electric car sales.

GM CEO and Chairwoman Mary Barra touted the new Chevrolet Bolt as being one of the few all-electric cars that could be purchased in all states.

Later, at a direct-sale discussion, a lawyer for Tesla chided Barra by saying that it was GM’s persistence in shaping dealer law nearly a century ago that has forced Tesla out of six states including Michigan and Texas.

“Because they voluntarily chose generations ago to use a certain business model, (GM thinks) everyone that comes after should be required as a matter of law to use the same model,” Tesla lawyer Todd Maron said Tuesday.

The FTC held a daylong workshop on the future of automotive distribution in Washington D.C. to discuss direct sales and how future autonomous cars could be sold. Elio Motors’ Vice President of Government Affairs Joel Sheltrown said a compromise could be found between old automakers and new automakers by allowing new automakers to circumvent franchise dealer agreements and sell cars to consumers.

“Let the customers decide what they want,” Sheltrown said. If automakers such as Elio can’t survive because consumers won’t pay for cars without intra-brand competition, the market will decide that for itself, he added.

Professor of economics at Yale University, Fiona Scott Morton, said that abolishing the current franchise dealer system would prevent “double marginalization” from the manufacturer and retailer to both add profit to new cars, and would ultimately benefit consumers.

National Automobile Dealers Association President Peter Welch disagreed with Morton and told workshop attendees that the average consumer spends 13.5 hours cross-shopping cars between dealers to find the best deal, according to his association’s data. Internet shopping has transformed carbuying, he said, but not to favor manufacturers; dealers are more transparent when it comes to prices than manufacturers would ever need to be.

“To say dealers don’t use the Internet is wrong. I don’t know of any other industry that’s embraced (the Internet) like auto dealers,” he said.

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40 Comments on “General Motors, Tesla Spar Over Electric Car Sales...”


  • avatar
    JimZ

    man, Tesla whines a lot.

  • avatar
    DeadWeight

    “GM CEO and Chairwoman Mary Barra touted the new Chevrolet Bolt as being one of the few all-electric cars that could be purchased in all states….

    …Later, at a direct-sale discussion, a lawyer for Tesla chided Barra by saying that it was GM’s persistence in shaping dealer law nearly a century ago that has forced Tesla out of six states including Michigan and Texas.”

    Cue Ruggles MANY DOZENS of misplaced responses (using a cutting edge 64GB RAM, overclocked, air-cooled CPU Desktop, no less).

    • 0 avatar

      I can’t laugh how I want to because I’m at the Tax Collectors office registering cars, but that reminded me of when my dad overclocked my PC in middle school and it failed and I lost my eigth grade term paper.

    • 0 avatar
      JimZ

      maybe I’m wrong, but it wasn’t the *automakers* who insisted on the dealership franchise model, but the dealers/associations themselves. I can’t imagine any automaker would pass up the ability to sell cars direct and pocket the additional profit that the dealer normally takes.

    • 0 avatar
      28-Cars-Later

      Air cooled? What a n00b. Everyone knows l337 run water cooling.

    • 0 avatar
      highdesertcat

      ” one of the few all-electric cars that could be purchased in all states….”

      I thought that Tesla announced that their all-electric cars were street-legal in all states and that buyers were importing them from states where they were sold.

      My understanding is that Tesla continues to sell every car they make and that Tesla cars can be found in every state already.

      IMO, not an issue since the Bolt and Tesla cars are not competitors, not cater to the same niche.

  • avatar
    kmars2009

    Barra needs to keep her mouth shut. She is allowing her vehicles made in China to be shipped here. Who knows where the Bolt will be made? If it is with the Volt, fine. If from China, they can keep it.

  • avatar
    RideHeight

    Déclassé for Tesla to react to a GM statement, no?

    • 0 avatar
      JimZ

      you’ve never seen some of the tantrums St. Elon has thrown on Twitter and elsewhere? This is *tame* for them.

      • 0 avatar
        RideHeight

        Beyond propagating nyuks at the flappy-door X I’ve never had any incentive to investigate Tesla and I’m not of the social world, so no, haven’t seen that.

        It appears from what you say, though, that young Master is in need of advisers who could channel his public persona into more appropriately haughty and reserved behavior as befits his customers.

        • 0 avatar
          highdesertcat

          “…channel his public persona into more appropriately haughty and reserved behavior as befits his customers.”

          Like Bill Gates, Elon Musk not only sells a dream but he also sells an attitude.

          But like Nadella’s Win10, the vision may be a little more difficult to implement.

          During my last visit to the San Jose/Santa Clara area, I was surprised at the number of Tesla cars parked everywhere.

          The customers who buy into the dream and vision are not average Americans, and that is what GM wants to cater to.

    • 0 avatar
      JimZ

      dupe, thanks to a database error.

  • avatar
    PrincipalDan

    Sighhhhhhhhhhhhhhh two kids squaring off on the playground.

  • avatar
    VoGo

    “To say dealers don’t use the Internet is wrong. I don’t know of any other industry that’s embraced (the Internet) like auto dealers,” said the president of the National Automobile Dealers Association.

    Who apparently never streamed a movie from Netflix, never called an Uber, never played a video game on his phone, never used Amazon, never made a phone call over VoIP, and sits by his mailbox diligently every year to get the annually updated yellow pages.

  • avatar

    A lot of imagination went into this piece with the intent to incite and deceive as its intent. Barra and Maron did NOT spar at the event. Barra wasn’t there. More on this when I get to a keyboard.

  • avatar
    SCE to AUX

    The survival of Elio Motors will not hinge upon its sales channel approach.

    Instead, it will depend upon consumers’ acceptance of a 3-wheeled car (strike 1) with outriggers (strike 2), and 1+1 seating (strike 3).

  • avatar
    seth1065

    I think the porn industry would disagree with this statement.

    “To say dealers don’t use the Internet is wrong. I don’t know of any other industry that’s embraced (the Internet) like auto dealers,” he said.

  • avatar
    jimble

    No one has “forced” Tesla out of Michigan and Texas. They are perfectly free to sell their cars there through dealers, just like everybody else does.

  • avatar
    anomaly149

    Make no mistake, the real OEMs aren’t worried about their dealers. They’re worried about being forced into a two tier market where they have to live with dealers and the peanut gallery gets to have Apple stores. It’s not hard to imagine Tesla doing well if they don’t have to follow the same laws everyone else does, just look at Uber.

    • 0 avatar
      VoGo

      What makes the car market so special that OEMs should have to sell through dealers?

      I get to choose between getting coffee at a Dunkin franchise, or through a Starbucks owned store. I can buy a TV from Best Buy, or order it from the manufacturer’s website. That seems to work. ‘

      If I were a suspicious person, I would guess that the dealerships contribute great sums of money to the campaigns of politicians who in return grant them legal protection from OEM-direct sales.

      • 0 avatar
        anomaly149

        Nothing makes that market special, but a two tier market, where the legacy players are saddled with a dealer system that the new kids don’t have to deal with is the definition of uneven playing field. That’s what they’re fighting over. The OEMs almost certainly don’t care so long as they all play by the same rules.

        • 0 avatar
          highdesertcat

          anomaly149, the dealer system was put into place because at the time it was the best thing going for those times.

          When my brothers retired from the new-car retail business and sold their six dealerships in four states, it took more than a year for all the approvals, licenses and permits to come through.

          The states want a hand in this even more so than the dealers.

          Uber showed the world that times have changed. And the states will fight them all the way.

          • 0 avatar
            anomaly149

            …. Which has nothing to do with my point. The real OEMs don’t want a two tier market. (Just like legacy cab companies have strong opinions on cab companies that operate outside the medallion system and established law)

            Whether or not the state has their own motivations, the established players want to make sure they don’t get left in the cold.

          • 0 avatar
            highdesertcat

            Tesla is a real OEM. So is Fisker, and Tata, not to mention BYD and the Chinese brands to follow Volvo and Buick to America.

  • avatar
    Vulpine

    ““To say dealers don’t use the Internet is wrong. I don’t know of any other industry that’s embraced (the Internet) like auto dealers,” he said.”

    That’s a man who clearly doesn’t understand the internet.

    • 0 avatar
      Drzhivago138

      He should’ve just stopped at the first sentence, which was correct.

      • 0 avatar
        Vulpine

        Agreed. I admit I like what they do, when they do it right; getting a chance to review their entire inventory from my desktop is a great thing because I can go in and say, “let me see this one” and show them their stock # from their site. But when they do it wrong… using stock model photos to represent a specific car, I’m less inclined to visit that dealership.

  • avatar
    Counterpoint

    General aviation aircraft are often sold directly by manufacturers to customers without a dealer. I wonder if Ms. Barra thinks that Textron should be legally required to use independent dealers in order to sell Cessnas in MI? Won’t someone please think of the poor airplane buyers?

  • avatar
    jthorner

    Tesla’s problem with certain states has everything to do with the political power of dealerships in those states and almost nothing to do with GM’s strategic decision 100 years ago to use the franchised dealer model.

    If, and it is a big if, Tesla ever grows to be a major supplier of automobiles they may also find that their direct sales model becomes a problem for them.

    Selling to early adopters isn’t the same as being a mass market player.

    Handling trade ins and service is going to be a real scaling challenge for Tesla.


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