[Oeva-list] [OEVA-list] SHOULD we let Tesla off the hook?

Eric Cha ericc at xenopi.com
Mon Jul 1 13:26:48 PDT 2013

On 7/1/2013 12:53 PM, Steve's Account wrote:
> On Mon, 1 Jul 2013, Eric Cha wrote:
>>> Who answers warrenty claims?
>> The manufacturer.
> And if the manufacturer has no representation in the state, who do you 
> sue
> and in what jurisdiction?


Note that nowhere in this discussion has anyone ever said that 
manufacturers would not be allowed to have a representative in the 
state.  I think you are confusing "direct sales" with "internet sales".  
Direct Sales does not mean that a sale MUST be over the internet or 
without a brick & mortar shop.  It just means that the sale is from the 
manufacturer, not a 3rd party.

>>> How do you enforce state lemon laws if there is no entity in the
>>> state with whom to pursue the claim?
>> Failure to adhere to a state lemon law could be grounds for banning 
>> the vehicles in question in the state.
> I think that's a stretch.. Can a state refuse to license a car that
> isn't the one being complained about? On what basis? 

Yes.  Failure of a manufacturer to comply with state law is grounds for 
banning that manufacturer from selling in the state. Look at California 
compliance vehicles.  Failure of manufacturers to provide CARB-certified 
vehicles would result in them being barred from selling vehicles in 
California.  Non-CARB compliant vehicles cannot be registered & licensed 
in California.

> What happens if
> you bring a car in from out of state.. purchased elsewhere, and try to
> license it? 

Good question.  Ask people who try to import vehicles that are 
non-compliant in California and get them licensed.

> Should a lemon claim "somewhere" stop you from licensing
> your legally purchased vehicle?

No, but failure of a manufacturer to comply with state requirements can 
be grounds for denying registration.

>>> There are a lot of "equipment" dealers who are reps for firms, handling
>>> product in each territory.
>> Yes, there are.  But I do not see any reason why those 
>> representatives must NOT be an employee of the manufacturer.
> So.. you are suggesting that each manufactuer have a registered agent in
> each state.. That "must" be an employee of the manufactuerer?

No, I am suggesting no such thing.  You seem to be very focused on this 
particular misreading of the argument.  Nobody is suggesting that a 
dealer MUST be an employee of the manufacturer.  What people are 
suggesting is the inverse actually.  Right now states BAR manufacturers 
from owning dealerships.  People are asking that manufacturers be 
ALLOWED to set up dealerships that the manufacturers OWN.

> I don't
> think that's true now!


>>> I'd like for the state of Oregon to still have a role in the sale of
>>> vehicles that run on Oregon roads.
>> It still would.  It's called vehicle registration and licensing.  A 
>> state can easily punish a manufacturer by banning registration of the 
>> manufacturer's vehicle - which would effectively kill sales of 
>> vehicles within that state.
> For the reasons I suggested above, I don't think this would pass muster
> under the equal protection clauses in many state and the federal
> constitution.
>>> I'm not sure that needs to be a brick and morter "dealership".. but I
>>> think there needs to be a registered agent in the state.
>> I agree, as would most customers I suspect.  As does Tesla. However, 
>> I still see no reason why the registered agent must be some 3rd party 
>> as opposed to a direct part of the manufacturer...
> I think either one would suffice... but you have to have "at least one"..
> and permitting internet sales won't "magically" create a Tesla "entity"
> in Wyoming!

Neither will the status quo of BARRING manufacturers from owning 
dealerships.  By the way, Internet sales are permitted all over the 
place already.  I bought my previous car over the internet - from a 
dealer in California, no less.

>> Eric
> <snipped a few paragraphs about companies dodging taxes because they 
> don't have brick & mortar presences in states>

Again, you are missing the point.  Proponents of change are not saying 
that "Direct Sales" = "Internet/Mail order sales".  You are assuming 
that particular interpretation.  In the context of the debate that is 
taking place around the country, "Direct Sales" = "Sales from the 
manufacturer - be it through a local presence or otherwise."

Tesla isn't dumb.  They know VERY FEW people will buy a $90k car without 
seeing it in person, driving it, etc. and having the support of a local 
representative.  To suggest otherwise is, well, not really a realistic 
argument, imho.

The main argument is "who owns the dealership?"  Right now, Tesla is 
BARRED from owning a dealership in most (all?) states.   Tesla isn't 
trying to get RID of dealerships.  They want to be ALLOWED to OWN the 
dealerships where their cars are sold.


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