Iowa Dealers Shut Down Tesla Test Drives As Rep Humiliates Them

Follow John

Sometimes you almost have to feel sorry for car dealers--or, more specifically, their ineptness at the public-relations end of their fight against electric-car maker Tesla Motors and its direct Internet sales to car buyers.

Consider Bruce Anderson, president of the Iowa Automobile Dealers Association--which successfully shut down the last of three days of Tesla offering Model S test drives in Des Moines earlier this month.

Anderson cited the state's regulation of car dealers as a method of protecting car buyers. That's reasonable, as far as it goes.

ALSO SEE: Tesla 'Will Prevail In All States' Against Dealer Lawsuits: Dealership Commentator

But then he goes further--noting, with deep dismay, that buying a car directly from Tesla would entirely preclude the process of the buyer having to haggle, dicker, and negotiate over price with the dealer before any car purchase could be concluded.

The awfulness of...Apple Stores?

His quote appears in coverage by the The Des Moines Register (via The Car Connection).

2014 Tesla Model S

2014 Tesla Model S

Enlarge Photo

Anderson suggests the awful prospect that buying a car would be just like buying a MacBook Air or an iPod directly from Apple: the price would be fixed and buyers would have no chance to negotiate.

"Anderson said if carmakers owned dealerships, buying a car would be like buying a laptop at the Apple store—there would be one non-negotiable price," writes the Register

The horror, the horror.


Tesla Store opening in Westfield Mall, London, Oct 2013

Tesla Store opening in Westfield Mall, London, Oct 2013

Enlarge Photo

Isn't that precisely how Apple Stores work today?


Car dealers vs public

Given the number of car buyers who have likely walked into Apple Stores--or, for that matter, any other retail outlet that sells high-dollar electronics or other goods for a set price--Anderson's argument may be the weakest yet offered up by dealer associations.

And the fact that he appears unaware that Apple Stores are hugely successful, and highly profitable for the company, isn't going to help him in the court of public opinion.

Tesla Store opening in Westfield Mall, London, Oct 2013

Tesla Store opening in Westfield Mall, London, Oct 2013

Enlarge Photo

Of course, to dealers, that's exactly the problem: Any profit goes not to the retailer, but to the company that makes the product.

DON'T MISS: Auto Dealers Try Charm: Why Tesla Direct Sales Hurt Buyers, They Say (Video)

But Anderson appears to be utterly unaware that while a minority of car buyers enjoy and appreciate the negotiations over price, the majority do not.

Surveys consistently show that buyers feel that dealers have taken advantage of them, even when statistically they have received a good deal on their particular purchase.

Expanding the ban to Tesla

Iowa, like many other states, has a flat ban--enacted at the behest of state car-dealer associations--that prohibits carmakers from selling cars directly to the public.

Originally enacted to protect existing franchised dealers from unfair competition by automakers who they felt could undercut them, these laws have been expanded in many states specifically to target Tesla--which, of course, has no franchised dealers to be protected.

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

Enlarge Photo

The Iowa Department of Transportation called the drive event illegal because Tesla isn't licensed as an auto dealer in Iowa.

A Tesla spokesperson told the Register that it didn't feel the statutes were applicable because Tesla was not selling cars, simply offering test drives.

But there will be no more scheduled Tesla drive events in Iowa.

We suspect electric-car advocates and Tesla supporters may view the state dealers' triumph as a loss for Iowa's actual car buyers.


Follow GreenCarReports on Facebook, Twitter, and Google+.

Follow Us

Take Us With You!


Get FREE Dealer Quotes

From dealers near you

Find Green Cars


© 2016 Green Car Reports. All Rights Reserved. Green Car Reports is published by Internet Brands Automotive Group. Stock photography by izmo, Inc.. Read Our Cookie Policy