Tesla's Utah Quandry, Will Elio Have The Same Problem?

[cortsdad2]

http://www.ksl.com/index.php?sid=34...sla-looking-for-options-in-utah&s_cid=queue-2

 

[WilliamH]

http://www.ksl.com/index.php?sid=34...sla-looking-for-options-in-utah&s_cid=queue-2

I think Paul may have hit it on the head when he commented that it's easy to fight changing the model on expensive cars but when it looks like you're trying to suck the blood out of poor people it's a lot harder to hold up that position.
Elio may have a better shot in Utah.
(Not exactly what he said............ My paraphrase.)

 

[RUCRAYZE]

I think Paul may have hit it on the head when he commented that it's easy to fight changing the model on expensive cars but when it looks like you're trying to suck the blood out of poor people it's a lot harder to hold up that position.
Elio may have a better shot in Utah.
(Not exactly what he said............ My paraphrase.)

Car dealers will be as relevant as Radio Shack . Dealerships are old "technology" and their lobbyists won't be able to turn back the (Elgin) clock!

 

[goofyone]

I think Paul may have hit it on the head when he commented that it's easy to fight changing the model on expensive cars but when it looks like you're trying to suck the blood out of poor people it's a lot harder to hold up that position.
Elio may have a better shot in Utah.
(Not exactly what he said............ My paraphrase.)

I had a short chat with Joel S., Elio VP of Gov Affairs, about direct sales a little while back and he pretty much told me what Paul said about it being harder for Politicians to stand against something affordable to everyone versus the Tesla which is only affordable to the smaller group closer to the top of the totem pole. He also said that they plan to tackle this, where needed, with targeted legislation intended to allow direct sales for autocycles and/or only allow direct sales from vehicle manufacturers who do not have franchise dealers in the state. By limiting the direct sales legislation to a narrow scope it makes it even more difficult to vote against these laws.

Another item is timing. EM knows direct sales will be more of a challenge to push through than seatbelt and helmet laws so they concentrated on those first thus making reservations and online sales much easier for them. It will also be much easier for EM to push direct sales legislation through when it is not theoretical but instead when EM is delivering these vehicles to reservation holders and getting ready to roll out the retail stores as this gives the matter urgency to help push lawmakers in action.

 

[cortsdad2]

I had a short chat with Joel S., Elio VP of Gov Affairs, about direct sales a little while back and he pretty much told me what Paul said about it being harder for Politicians to stand against something affordable to everyone versus the Tesla which is only affordable to the smaller group closer to the top of the totem pole. He also said that they plan to tackle this, where needed, with targeted legislation intended to allow direct sales for autocycles and/or only allow direct sales from vehicle manufacturers who do not have franchise dealers in the state. By limiting the direct sales legislation to a narrow scope it makes it even more difficult to vote against these laws.

Another item is timing. EM knows direct sales will be more of a challenge to push through than seatbelt and helmet laws so they concentrated on those first thus making reservations and online sales much easier for them. It will also be much easier for EM to push direct sales legislation through when it is not theoretical but instead when EM is delivering these vehicles to reservation holders and getting ready to roll out the retail stores as this gives the matter urgency to help push lawmakers in action.

I keep hearing people say that this isn't going to be an issue because these aren't "cars" but I'm not so sure of that. New car dealers associations have a lot of clout (read $$$) with lawmakers. The crazy part is that these states that are doing that are just sending sales tax revenue to surrounding states!

Here in Utah (the reddest of the RED states), we are SURROUNDED with states that have legalized gambling and Utah BLEEDS money to every state around it. But when a theocracy that abhors gambling (and alcohol) runs things, ya get plenty of lunacy! I never leave this state without coming home with a trunk full of my favorite spirits (and a few lottery tickets)!! Cheers! (and wish me luck!)

 

[CheeseheadEarl]

The crazy part is that these states that are doing that are just sending sales tax revenue to surrounding states!

I don't know how your state operates, but if I buy a vehicle anywhere, I pay the sales tax to the state of WI when I title it.

Sales tax is also supposed to be paid on items bought out of state; there is a line on state income tax returns to report this. I'm certain it's not the most commonly filled in line by a long shot, though.

Not that I disagree with you though. States lose money every time they restrict business. Here, liquor stores are full of MN residents every Sunday who didn't plan ahead and can't buy there. It may be the biggest sales day of the week for many border town shops.

 

[goofyone]

The dealers associations may be powerful now however they are reacting because they are scared as they know their direct sales monopoly will be reduced or eliminated over time. The pros and cons of direct sales have been studied by the auto industry, and the federal government, and it is well understood that mandatory franchise laws may not be in the best interest of consumers as this system increases costs throughout the process. The franchise system is also not optimal for auto manufacturers as the system increases vehicle inventories and distribution costs. The current franchise system also leads to very high costs incurred by dealers in the sales process. All of these factors lead to higher vehicle prices for consumers.

The large auto manufacturers are fully aware of the advantages of the direct sales model as used by Tesla, and soon Elio Motors, as these very same auto manufacturers have used this model successfully in other countries. This is why the large auto manufactures have left this fight mostly up to the dealers association with only half ass support when they are forced to do so. In reality the large auto manufacturers are not looking forward to seeing the ideas which they developed and have proven to be successful overseas being used by someone else to compete against them in this country.

http://www.justice.gov/atr/public/eag/246374.htm
https://www.ftc.gov/news-events/pre...i-new-jersey-should-repeal-their-prohibitions
http://www.autoblog.com/2014/05/19/ftc-favors-tesla-direct-vehicle-sales/


The DOJ report I have linked to has an interesting section about what GM has been doing successfully in Brazil since 2000. What is interesting about this is that this model of highly efficient design, manufacturing, distribution and sales is actually the business model that Paul Elio used as the basis for Elio Motors. So Paul Elio is not even using a new unproven idea for how Elio Motors should operate but instead he has adapted a business model proven to be successful by none other than General Motors.

Since 2000, customers in Brazil can order the Celta over the internet from a site that links them with GM's assembly plant and 470 dealers nationwide. By 2006, 700,000 Celtas had been produced and the car continues to be one of Brazil's best sellers. Consumers have 20 "build-combinations" from which to configure a model of their choice, including colors and accessories, and can view each change as it is being made. GM built five distribution centers throughout Brazil to reduce transportation time from its assembly plant and buyers can track location of their car online on its way to delivery at a dealer of their choice. The time from configuration at the factory to delivery is only about a week, in contrast to the several week wait that can be common in ordering a car in the United States. The Celta was designed by GM in collaboration with suppliers who deliver just-in-time pre-assembled modules to the factory. GM estimates that collaboration in design and manufacturing enabled it to use 60 percent fewer suppliers and 50 percent fewer parts than in a traditional assembly operation. According to Mark Hogan, president of e-GM at the time of the Celta's introduction, GM can sell Celtas 24 hours a day and enjoys a competitive advantage from reduced production time, lower inventory levels and an overall more efficient distribution and sales model where dealers need to stock only two models, one for the show room and one for test drives. Consumers benefit from Celta's online no-haggle pricing structure, where prices are about 6 percent lower than for sales made through conventional distribution channels. The price is lower because GM passes on to consumers some of the tax benefits it gets from the Brazilian government as a result of the reduced inventory and real estate associated with online sales.

Source: Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers
http://www.justice.gov/atr/public/eag/246374.htm

 

[CheeseheadEarl]

A thought from my farmer's view. For the last 10-15 years, Deere, and to a lesser degree the other Ag manufacturers have been consoldating dealerships. Where there were once many small mom and pop dealers, now many areas are served by stores run by mega dealers - my local one is part of a 7 store chain, many are much bigger than that; RDO Equipment covers all or part of 9 northern and western states.

There are a bunch of reasons for this, but the main one is that corporate Deere now has many less dealer "customers" to manage.

How would this apply with Elio? I could see an agreement with CarMax or a new company to sell them in states where direct sales are banned, with minimal added headache (but still added cost - imagine having every E buyer in those states sign a form like this: "Due to laws in the state of XX, I understand that $ XXX is charged to the base price to cover mandatory dealership costs." That would rile the voting public!)

Bottom line: one multi state mega dealer could cover the protectionist states if need be. Something tells me it would likely be as closely connected to Elio as those states' laws allow; a satellite company if you will.

 

[cortsdad2]

I don't know how your state operates, but if I buy a vehicle anywhere, I pay the sales tax to the state of WI when I title it.

Sales tax is also supposed to be paid on items bought out of state; there is a line on state income tax returns to report this. I'm certain it's not the most commonly filled in line by a long shot, though.

Not that I disagree with you though. States lose money every time they restrict business. Here, liquor stores are full of MN residents every Sunday who didn't plan ahead and can't buy there. It may be the biggest sales day of the week for many border town shops.

I've bought cars out of state (Utah) and if you provide proof of payment of sales tax to another state, Utah will not charge sales tax. I just look at which state has the lower rate... and pay there.

 

[RUCRAYZE]

I've bought cars out of state (Utah) and if you provide proof of payment of sales tax to another state, Utah will not charge sales tax. I just look at which state has the lower rate... and pay there.

anyone know if that will apply if we pick-up at the plant?
Do we get a temporary tag to get home?
thanks