Tesla's Model3 is expected to be the electric car company's first mass-market vehicle.
Tesla’s Model 3 is expected to be the electric car company’s first mass-market vehicle.

By Stuart C. Siegel

Tesla’s electric vehicles are often described as disruptive to the motor-vehicle industry, and understandably so. The U.S.-based company’s all-electric vehicles are well designed, transparently priced and environmentally friendly, and the company is setting high standards for other car makers to follow.

Tesla’s sales model is disruptive, too. The company has never been part of the auto dealer-franchise system that is now entrenched in the modern marketplace. This direct-sales strategy has irked Virginia’s car dealer lobby, but it’s indisputably good for the car-buying public.

And that’s precisely the measure by which existing Virginia law allows for a car manufacturer to sell directly to consumers, rather than through a designated middle man. The commissioner of the Department of Motor Vehicles has the authority to allow Tesla to operate its own store in the Richmond area, and he should approve the company’s application.

Tesla already operates a store in Tysons Corner, where I serviced my all-electric Model S sedan and more recently purchased a Model X. The experience, like the car, was unlike any other I’ve encountered because the company is committed to educating customers about the vehicle and its innovative technology, rather than rushing to make a sale.

Since opening that store, Tesla has witnessed more demand elsewhere in Virginia. In a free market, a company should be able to make its own business decisions about how and where it serves its customers. Tesla wants to do so by opening a showroom and service shop in a vacant furniture store at Broad Street and Stillman Parkway. Henrico County’s Board of Supervisors has approved the company’s use of the site, and county officials recognize the potential for Tesla to help revitalize that area, bolster the local economy and create dozens of new jobs.

The Virginia Automobile Dealers Association has overreacted by trying to block Tesla’s application. The lobbying group, long known for doling out hefty campaign contributions, has been spreading false information for months in an underhanded attempt to manipulate regulators and legislators. The association even filed a lawsuit against Tesla and the DMV. The case, and every allegation made by VADA, was recently dismissed by a circuit judge in Fairfax.

VADA exists, above all else, to protect dealer franchises. Its claim that Tesla shouldn’t be allowed to sell directly to the public because independent dealers want to sell Tesla products is a clear signal that the lobbying group’s argument has crossed into fantasy.

Dealers must make a profit to stay in business. An independent dealer can’t profit off Tesla sales because few, if any, car buyers would pay a dealer’s marked-up price when they could walk out of the store and order the car for the lower, fixed price available at tesla.com. And dealers wouldn’t be able to recoup a profit on the back end through pricey service needs because, unlike a combustion-engine vehicle, a Tesla has no oil, gasoline or traditional transmission. Its battery pack carries an eight-year, unlimited-mile warranty.

Numerous studies and news reports have shown traditional car dealers offer a less satisfying consumer experience than Tesla. Some also were found to steer buyers away from electric vehicles and into gas-powered cars, even when those buyers expressed interest in purchasing an electric vehicle.

That’s particularly worrisome for a growing manufacturer such as Tesla. Its Model S has racked up industry awards, and its Model 3, a smaller sedan set to start at $35,000, will begin production next year.

Sales staff must be able to answer questions with specificity and accuracy about a Tesla’s innovative technology, batteries and warranties, charging and maintenance, and other incentives, none of which is applicable for the sale of a gas-powered vehicle.

And unlike the bigger manufacturers, Tesla doesn’t make gas-powered vehicles that customers can be diverted toward on a dealer’s lot and still record a sale. The company is exclusively focused on building powerful, stylish, electric cars, and helping consumers learn about them and find the proper model is its mission.

Industry research and Tesla’s own track record suggest the company can sell its cars more effectively, and at a lower cost, than traditional car dealers, and it can give customers the service and attention that they deserve. Hopefully that can happen soon in Richmond.

Stuart C. Siegel is a Richmond resident and Tesla owner.

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20 responses to “Let Tesla Open in Richmond”

  1. LarrytheG Avatar

    There are ironies and hypocrisy all over the lot here.

    The VADA undoubtedly votes GOP and opposes “onerous, job killing ” government regulation and taxes … and will no doubt blather from now til the cows come home about the joys of the free market and competition…

    until their own proprietary Ox gets gutted… 😉

    hoisted on their own petard!

    apparently it’s fine to screw over the Hoi polloi of auto buyers but not so those elitist Tesla types, eh? hmm… are Tesla buyer leftists?

    1. Only VADA member I know is Don Beyer. I doubt he’s voting to make America great again.

  2. Peter Galuszka Avatar
    Peter Galuszka

    Larrythe G has it nailed.

    The dealers’ association is about as anti market as you can be. Their goal is to protect the century-old systems of parts flowing for the internal combustion engine. The industry is worth billions and billions. The last thing they want is a new car that doesn’t have a fossil fuel engine.

    1. LarrytheG Avatar

      yep – but Peter, that don’t keep them from contributing and voting to Republicans who promise less regulation and more free markets!

      I’ll bet every one of these guys votes for Brat/Trump!

  3. LOL- (or Laugh Out Loud). Larry I will take your bet. What do you want to bet? I should tell you that this will be a sucker bet. Mr. Don Beyer is a Democrat who is the current U.S. Representative for VA District No. 8. And somebody in his family belongs to the VADA, and runs an automotive dealership. Mr. Beyer used to run that dealership until he was elected to the U.S. House. While I am not sure how we will actually know how the Beyer family votes, I am comfortable contending that these folks will vote for Beyer/Clinton, not Brat/Trump. Which just goes to show you that making a sweeping generalization like you just did (everybody in the VADA will vote for Brat/Trump) can be easily disproven.
    And Peter, I would contend that the VADA is less about electric vs. combustion engines, and more about local dealerships vs. company owned dealerships. If Tesla were to allow local dealers to sell their cars, versus keeping is under the control of the company itself, I will contend that the VADA opposition fades away.

    1. LarrytheG Avatar

      so you have Beyer a Dem wanting sell Teslas , to do away with the restrictive regs and the rest of VADA who are not selling Teslas opposing removing the restrictions those restrictions and we think they are all Dems also?


      I still strongly suspect most auto dealers are not Dems and don’t vote Dem – Mr. Beyer not withstanding… but if someone provides convincing data – I will do a mea culpa!

      1. Why would anyone have to provide convincing data to counter your unfounded allegation? But, since you asked …

        Here’s a long running list of donations by VADA to Dick Saslaw:


        It doesn’t matter whether the politician is Democrat or Republican. VADA donates to manipulative, corrupt, crony capitalists.

        I would have thought after this election and the exposure of Criminillary Clinton as the felon she is you’d see the light. How many speeches did she have to give at Goldman Sachs for you to see the forest for the trees?

    2. Agree with your reaction to Peter’s speculation, JNL. Time will tell.

  4. I don’t have the answer on this one, but just to point out this same debate is going on in many states where Tesla is asking for unique and low overhead way to sell cars that does not involve the traditional dealership model. Just imagine how much these cars would cost if it were a GM or a FORD.

    I would like to see VADA be more like California ADA publishing quarterly summaries of car sales. We could see if excessive car property taxes are hurting sales, and start to evolve better policies, and improve car sales. I’d love to know how much car tax Telsa owners are paying in Va.

  5. TooManyTaxes Avatar

    “Regulating” an industry under two sets of rules is a recipe for trouble. What if Ford, for example, developed a new technology vehicle in a separate subsidiary? Let’s imagine an engine that ran on CO2. Further assume, Ford wanted to bypass its dealership network and sell the car directly similar to Tesla.

    Same result? Different result? Why?

  6. LarrytheG Avatar

    Not only Tesla – remember the Delorean and there are others.

    The dealers are legalized predatory businesses whose business models are not new cars but parts and service and Tesla would change people’s thinking on that whole realm …

    anyone who talks about free markets, competition, etc should support Tesla… not the car – the different way of marketing…that would pave the way for other cars and I think allow smaller entrepreneurs to start-up and offer more options for consumers.

    It is so ironic that we’re changing to accommodate Uber and Airbnb and reforming licensure and COPN, etc and this industry seems to have our esteemed GOP-dominated representatives in Richmond by the short hairs. You’d think the GOP would lead the charge.. eh?

    1. “The dealers are legalized predatory businesses …”

      Somebody ring a bell. LarrytheG gets it! Now, let’s talk wine and beer distributors, all the businesses in Virginia with company-specific and industry-specific tax breaks, etc.

      Too bad LarrytheG still is still stuck in the RPV vs DPV swamp. When Chap Petersen proposed legislation to put a 5 year term on company-specific and industry-specific tax breaks in Virginia the opposition came from both parties. Donald McEachin, liberal icon, was one of the leader of the opposition to this intelligent legislation.

      They are all crooks, LarrytheG.

      1. It’s like the Utilities, the states want to have their control on how businesses are run.

        But I have positive impressions of VADA. Some Toyota dealership members of VADA helped me when we had the short-lived hybrid fee…apparently McDonnell’s hybrid fee was rammed through without seeking any input from VADA. My contact seemed to feel VADA was productive and cooperative.

  7. LarrytheG Avatar

    re: ” They are all crooks, LarrytheG”

    yes .. but it’s the GOP that controls legislation… and has the power to deep 6 it without even a voice vote or move it to the floor – get it voted on and force the Gov to sign it or veto it – and THEN in the override you can INCLUDE the Dems if they end up voting to not override.

    Besides that DON – Dems usually WANT govt rules and regulation and it’s the GOP that vents their spleen talking about onerous job-killing rules and how the free market and competition is the right way.

    I’m pointing out – they talk the talk but they don’t walk the walk.

    Don’t blame the Dems – they’re pretty much consistent with what they say they favor and how they actually vote.

    If Tesla was magically renamed COPN – the GOP would go ape-crap! Right?

    weasels is the word that comes to mind… you can disagree with someone philosophically – as long as they are true to their values. Agree to disagree on the merits….

    But what about those folks who beat their chests about less govt, more free market… and all that rot then they run and hide when the Tesla issue pops up… ???

  8. LG, an important point you make this Election Day: “you can disagree with someone philosophically – as long as they are true to their values. Agree to disagree on the merits…. But what about those folks who beat their chests about less govt, more free market… and all that rot then they run and hide when the Tesla issue pops up… ?”

    I call that “governing from the center” — aka “political compromise,” and sometimes simply “politics as usual.”

    Ideologues are merely those self-righteous, arrogant poseurs who refuse to govern, and spend all their time talking about impeaching anyone who dares try to govern. They don’t know that the best interests of ALL the people are served by passing budgets, and keeping the social safety net in good repair, and keeping essential emergency and education resources well run and funded, and THEN you can cast around to see what else you can find time and support to accomplish. A plague on all ideologues!

    And worse yet are the populists — the narcissists, the opportunists, those who will tell you anything you want to hear but their word is merely today’s drivel, never a real commitment, never a goal of really doing good for the public — their real, their SOLE, political purpose is to look out for Number One.

    I’ll agree with you this far: the politician who articulates ardent support for a belief today and an inconsistent belief tomorrow loses my respect — if he understands it himself, my respect for his integrity, or if he just doesn’t get it, my respect for his intelligence, but the same in the end — whereas a proper politician knows how to tell you what he believes, yet also how and when to compromise, how and when to hold his nose and do what good governance requires.

    1. LarrytheG Avatar

      re: ” I call that “governing from the center” — aka “political compromise,” and sometimes simply “politics as usual.””

      I’m okay with compromise – it’s how you move forward.

      what I’m not okay with is hypocrisy on the principles and intransigence, obstruction and outright refusal to try to find common ground to go forward on what can be agreed on.

      We can all say what we don’t like – but when we say we don’t like and we will not compromise either – then where does that leave us?

      serious question – this is where we are right now.

  9. TooManyTaxes Avatar

    My questions remain open. What about my hypothetical situation involving Ford and a new technology vehicle?

    ‘What if Ford, for example, developed a new technology vehicle in a separate subsidiary? Let’s imagine an engine that ran on CO2. Further assume, Ford wanted to bypass its dealership network and sell the car directly similar to Tesla.

    “Same result? Different result? Why?”

    1. LarrytheG Avatar

      @TMT – I did not see it as a serious question… but rather a rhetorical one…

      it don’t matter really – what the specifics of the innovation is – right?

      what matters is why would WE ever restrict – from the market – from competition in the market – ANY innovation as long as it was safe and beneficial to would-be customers?

      I think the VADA deal is no different than Uber… when you get right down to it… It’s would not matter whether it was Tesla or some other automobile innovation..

      by the way – did you guys realize that American car manufacturers – as well as others in the world – manufacture cars for Mexico that look just like ones made for the US – but they do not have air bags?

      what do ya’ll think of that? Should the USA do like Mexico and leave it up to the customer to decide if they want to pay extra for air bags?

      let’s see how many “pro-govt” folks we have here… heh heh…

  10. TooManyTaxes Avatar

    My point is how do we justify one set of rules for Ford, GM, Honda, Toyota, etc. and another for Tesla. As I understand the rules, the former are forbidden to sell cars directly to the public. I can see good arguments on both sides of the issue – for dealerships and for direct sales. I don’t see an argument for restricting the former to sales through dealerships, while allowing Tesla to sell directly.

    What it looks like to me is more special rules for billionaires from the West Coast. Either restrict Tesla or rewrite Title 46.2:, Chapter 15 of the Code of Virginia.

    1. TMT – I don’t necessarily see it as one set of rules for the other automotive dealers and another for Tesla. In the early days, personal computers were mostly sold by specialty computer dealers. Then Dell came along and developed a way to provide a high level of customer service and a lower cost by selling computers directly to customers.

      No industry association cried foul and tried to prohibit Dell from using this business model. Customers were allowed a choice and each business had to provide a value proposition that was attractive to the customer whether it was through a brick and mortar store or through direct sales.

      Customers are not being harmed by Tesla’s model. In fact, they are benefitting from it. That is how we progress, through better ideas and disruptive technologies.

      Should we have required new car buyers in the early 1900s to purchase buggy whips just to protect an entrenched industry? Trade-restricting policies only serve to reduce customer choice and increase prices. Crony capitalism has already erected too many barriers to entry for new products and services in order to protect the existing market leaders that make large political contributions.

      It sounds like VADA does some worthwhile activities. Let them educate the dealers about how to better serve their customers and prepare to properly sell the wave of EV’s that will be coming in the next 10 years.

      The current dealership model was developed by the car manufacturers to pass off their inventory costs to local dealers. They sweetened the deal by giving local dealers the parts and service business.

      That won’t work with electric vehicles because they have only about 14 moving parts – so no huge service center profit for car dealers. They need to start adapting for the future instead of instead of erecting a wall of protectionism.

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