Elon's political antics may help WA EV consumers

[whitex]

So maybe a decade ago, the dealership associations paid off Washington state lawmakers to ban direct-to-consumer car sales (model used by Tesla, Rivian, Lucid, and other upstarts). The bill had trouble passing as Tesla was already established in Washington (there would be a whole bunch of really pissed off constituents with money back then if Tesla was forced to close their service centers in the state), so they amended it to grandfather-in Tesla existing stores/service centers in order to get enough votes to pass. However, it seems now the left wing WA politicians' hate for Elon might be stronger than their addiction to political lobby donations (we'll see if it's really true if it passes):
https://www.geekwire.com/2025/tesla...washington-state-if-lawmakers-pass-new-rules/

Let's see if the dealer associations find and pony up the right price to kill this. They are definitely trying, there was even talk of a bill to simply ban Tesla from the state instead, but while the dealerships associations might think it would help kill this bill (no more Tesla, no reason to allow Lucid or Rivian or others to sell in the state, right?), it's unlikely to pass for many reasons.

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[Flying ace]

I hate Kim Jong Musk for many different reasons namely that he's a snake oil salesman. But honestly, this is the wrong approach. Let the consumer vote with their wallet. If people still buy Teslas, they don't hate him enough.

Everyone is a hypocrite until they put their money where their mouth is. Wife has liberal friends who own Teslas, none have sold yet.

 

[kort]

So maybe a decade ago, the dealership associations paid off Washington state lawmakers to ban direct-to-consumer car sales (model used by Tesla, Rivian, Lucid, and other upstarts). The bill had trouble passing as Tesla was already established in Washington (there would be a whole bunch of really pissed off constituents with money back then if Tesla was forced to close their service centers in the state), so they amended it to grandfather-in Tesla existing stores/service centers in order to get enough votes to pass. However, it seems now the left wing WA politicians' hate for Elon might be stronger than their addiction to political lobby donations (we'll see if it's really true if it passes):
https://www.geekwire.com/2025/tesla...washington-state-if-lawmakers-pass-new-rules/

Let's see if the dealer associations find and pony up the right price to kill this. They are definitely trying, there was even talk of a bill to simply ban Tesla from the state instead, but while the dealerships associations might think it would help kill this bill (no more Tesla, no reason to allow Lucid or Rivian or others to sell in the state, right?), it's unlikely to pass for many reasons.

really? banning a company like tesla because the owner's political opinions are not in step with the politics of the legislature? what is wrong here?

 

[CaliPorsche]

really? banning a company like tesla because the owner's political opinions are not in step with the politics of the legislature? what is wrong here?

Hmmmmm ….. no……… The opposite of that …. removing the unfair advantage Tesla currently has over other startup EV makers in the State ….. read the article.

 

[Watchesandburgers]

Texas had (has?) franchise requirement laws, but it seems that Tesla and other manufacturers sell directly in the state anyway. The bill in the linked article seeks to remove the carve-out that allows only Tesla to sell direct to consumers in that state. I agree that should be removed to allow all reputable brands to sell direct. The Loony Left Coast has some weird laws on the books and this article points to the removal of one such weirdness.

 

[Mr.Smith]

Direct to consumer is great as long as the manufacturers fall under the laws of the franchise dealers that protect the consumer.
Right now they don't

 

[CaliPorsche]

Direct to consumer is great as long as the manufacturers fall under the laws of the franchise dealers that protect the consumer.
Right now they don't

Agree that laws need to be in place …….. and/or followed to protect the consumer …. But unless you own stock in, are employed by or operate a franchise dealership …. hard for me to understand the value add that justifies 18% gross margin that at least one large public dealer made last year. We are simply adding a slice of consumer cost into the value chain ,.,,,, IMHO.
If someone can explain the value add that a separate operating entity adds into the chain to me I am open to be convinced otherwise …..

 

[Mr.Smith]

Agree that laws need to be in place …….. and/or followed to protect the consumer …. But unless you own stock in, are employed by or operate a franchise dealership …. hard for me to understand the value add that justifies 18% gross margin that at least one large public dealer made last year. We are simply adding a slice of consumer cost into the value chain ,.,,,, IMHO.
If someone can explain the value add that a separate operating entity adds into the chain to me I am open to be convinced otherwise …..

There is actually a huge value add with dealers. Inventory management of vehicles and parts, financial liabilities shared with the manufacturer. No direct to consumer manufacturer has solved these problems, not even Tesla.
A hybrid approach might be a solution.

 

[CaliPorsche]

There is actually a huge value add with dealers. Inventory management of vehicles and parts, financial liabilities shared with the manufacturer. No direct to consumer manufacturer has solved these problems, not even Tesla.
A hybrid approach might be a solution.

Well I agree with the Hybrid comment - but the point on inventory is exactly the opposite .... Inventory is simply working capital sitting idle and depreciating - when there is no coordination - a duplication of that working capital takes place.
The inventory the manufacturer holds for new product - [or their suppliers hold for them] added to the inventory the dealers hold (some of whom often compete with each other) simply multiplies the inventory needed to meet a reasonable mean time to repair for the customer.
We get to pay for that inventory in the car and service price (3-5% margin on new product 40-60% margin on parts).
I spent 10 years as an executive in a multi billion dollar OEM dealer model (not cars) and I can tell you inventory turns along the value chain are a huge drain on capital efficiency.
Now - there may be arguments for focus 9manufacturing v service), service quality, timeliness etc. etc..... but honestly I just have never seen that in the car dealer model..... sample area of one.....

 

[Mr.Smith]

Well I agree with the Hybrid comment - but the point on inventory is exactly the opposite .... Inventory is simply working capital sitting idle and depreciating - when there is no coordination - a duplication of that working capital takes place.
The inventory the manufacturer holds for new product - [or their suppliers hold for them] added to the inventory the dealers hold (some of whom often compete with each other) simply multiplies the inventory needed to meet a reasonable mean time to repair for the customer.
We get to pay for that inventory in the car and service price (3-5% margin on new product 40-60% margin on parts).
I spent 10 years as an executive in a multi billion dollar OEM dealer model (not cars) and I can tell you inventory turns along the value chain are a huge drain on capital efficiency.
Now - there may be arguments for focus 9manufacturing v service), service quality, timeliness etc. etc..... but honestly I just have never seen that in the car dealer model..... sample area of one.....

Would agree with the benefit being service and timelines. You can get parts fast and easily with a Toyota, but not Tesla. Same goes for a car.

 

[whitex]

Hmmmmm ….. no……… The opposite of that …. removing the unfair advantage Tesla currently has over other startup EV makers in the State ….. read the article.

Or more specifically, WA legislators want to allow other manufacturers (like Rivian or Lucid) to sell EV cars in the state, in order to remove Tesla's advantage. The only reason Tesla has that advantage in the first place was because of all the lobbying (i.e. political donations) by dealers associations, but now the left wing politicians' hate of Elon might be stronger than greed - only time will tell which one will win out.

 

[Jonathan S.]

This is like the Rube Goldberg version of regulatory capture:
In reaction to the imminent regulatory capture by the Tesla CEO of, let's see, hmm, perhaps the entire federal gov't, a state legislature is finally ending regulatory capture by Tesla and legacy dealerships regarding DTC prohibition (for anyone except Tesla).

Or is that two wrongs make a right?
Or rather, one terrifyingly major new wrong at least results in a far lesser wrong being righted.
(Glass 0.01% full!)

Direct to consumer is great as long as the manufacturers fall under the laws of the franchise dealers that protect the consumer.
Right now they don't

Such as?
I searched quickly in an attempt to find some examples of franchise laws that protect consumers, who would not be otherwise protected, but all I found was industry assertions to that effect.

There is actually a huge value add with dealers. Inventory management of vehicles and parts, financial liabilities shared with the manufacturer. No direct to consumer manufacturer has solved these problems, not even Tesla.
A hybrid approach might be a solution.

Although the day still has a few hours remaining, posting this in a Taycan forum definitely merits my nomination for Ironic Internet Forum Post of the Day.

 

[Art]

I hate Kim Jong Musk for many different reasons namely that he's a snake oil salesman. But honestly, this is the wrong approach. Let the consumer vote with their wallet. If people still buy Teslas, they don't hate him enough.
...

Talking about hate - Tesla sales in Germany dropped 59% in January.
Tens of %'s in many other EU countries.

During 40's KdF Wagen was selling good.
Todays AfD Wagon is just hated.

Heil Musk!

 

[Jonathan S.]

^ Or Europeans could be buying fewer Teslas b/c of inroads there by Chinese marques. Or they're just waiting for the new(-ish) Model Y.

 

[Tooney]

Such as?
I searched quickly in an attempt to find some examples of franchise laws that protect consumers, who would not be otherwise protected, but all I found was industry assertions to that effect.

Maybe he means auto dealer franchise laws like this one in Ohio, which 'protects consumers' by limiting the doc fee to $387 or 10% of the price:

When you buy a car here the dealer tells you the doc fee is a state requirement.......

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