[qwanzi77]

Incumbent manufacturers have to go through dealers. Allowing Tesla to bypass dealers wouldn't be fair to other car manufacturers.

"Tesla repay a big federal loan a few weeks ago, many years before they had to?"

Why does this matter? They were given a large loan. That large loan gave them a large runway to have one profitable quarter, which allowed them to pay back the loan by issuing shares and bonds. Another car manufacturer couldn't do the same if you gave them $500M loans? Why should Tesla get it and not others?

[cstross]

Why should incumbent manufacturers have to go through dealers? Why can't they sell direct to the end customers via the internet?

Do the incantations "disintermediate all supply chains" and "disrupt all mature industries" suddenly lose all their magical HN mojo when confronted with the Kryptonite of the car industry?

[atdrummond]

Not legal in most US states, especially for established firms with outstanding dealer agreements. (http://en.wikipedia.org/wiki/Car_dealerships_in_North_Americ...)

A not insignificant portion of GM/Chrysler's restructuring costs were buyout payments for dealers, many of whom were not profitable.

[bob13579]

This is a different argument altogether. The original argument was about Tesla playing on an unfair playing field, which is demonstrably false. Other car manufacturers have to go through the same dealer network. Why should Tesla be allowed to sell directly when other car manufacturers can't?

[cstross]

What is this word "allow"?

Who forces car manufacturers to go through a dealer network? Or rather, who forbids them from selling direct to the public? Doesn't that constitute unfair restraint on trade?

I'm serious here. (Non-American speaking.) Is there some law that mandates that cars can only/must be sold through dealers?

[flinty]

There literally is a law in every state that prevents direct sales. Check out this planet money podcast about this very topic http://www.npr.org/blogs/money/2013/02/12/171814201/episode-...

[notdrunkatall]

I think the point is that law should change.

Maybe it actually protected consumers three decades ago, but now, consumers have access to more than enough information to make those kinds of decisions for themselves.

[saalweachter]

You don't need to be fair to incumbent manufacturers. They're the incumbents, they already have a bajillion advantages.

Aren't the incumbent manufacturers the ones who lobbied for those dealership laws in the first place, to raise the bar for entry into the market place? (And if not, haven't they had year with piles of cash beyond our wildest dreams to buy off legislators and get the law changed?)

I am perfectly happy to have the federal government give out loans to startups to disrupt stagnent industries. Can you imagine how our ISP industry would be doing if, instead of passing laws which make it impossible to disrupt, the US government was occasionally throwing half a billion at people who wanted to try? Granted, Elon Musk wasn't exactly at the 'rags' phase of a rags-to-riches story when he got his loan...

[bob13579]

No, if you study the automotive industry, you'll see that those car manufacturers have been trying to get around those dealers by building their own dealerships (which are quickly shut) or selling their cars online (which again are prevented). They're not lobbying for dealerships in countries where you can sell cars directly to the consumer. Take Brazil or Germany for instance.

[rainforest]

For my own benefit, do you have more information about the circumstances of Tesla's loan? Did they get a special deal, or were they just successful applicants to an open-to-all opportunity?

[snowwrestler]

> Incumbent manufacturers have to go through dealers. Allowing Tesla to bypass dealers wouldn't be fair to other car manufacturers.

Why? Why not just let everyone sell direct?