Department of Justice Paper Advocating Direct Sales of Cars by Manufacturers

Department of Justice Paper Advocating Direct Sales of Cars by Manufacturers

Here’s a link to a 2009 paper written by an economist for the Antitrust Division of the US Department of Justice advocating direct sales of cars by manufacturers:

Curt Renz | June 19, 2013

Here's another one written in 1999 by a Federal Trade Commission official to a senior North Carolina legislator offering the opinion that a bill to prevent direct sales by car manufacturers would adversely affect competition and harm consumers: | June 20, 2013

+1 Thanks for this | June 20, 2013

"...the average dealership actually lost money on new car sales in 2006 and 2007 and, even in years of profitable new car sales, profits on service and parts tended to be higher..."

Curt Renz | June 20, 2013

You're welcome, TDurden.

Residents in states seeking to block Tesla Motors need to e-mail their governors and state legislators. Seriously, this must be done right now.

And today each of us needs to e-mail his/her US senators, US district representative, the US Department of Justice, the Federal Trade Commission and the White House.

Brian H | June 20, 2013

The 2009 paper had only the GM Brazil Celta direct auto sales model to use as a comparison, and found it quite successful (700,000 cars in the $25K range). IMO TM should contact the author of this paper directly: (?) or c/o .

Bubba2000 | June 21, 2013

I am afraid the politics are corrupted. This is issue will have to be decided in Federal Court. Winner take all. Any lawyers in the house care to comment?

fcusinga | June 21, 2013

The government is taking our privacy to talk over the phone now they want to take our freedom of the way we buy cars. What!!! we don't have a choice anymore???

ELON please make a website where all supporters of TESLA can sing in.

count me in :) go tesla

Bubba2000 | June 21, 2013

The gumment is for sale to the highest bidder. The special interests control policy. Look at the tax laws that favor the ultra rich. Obama went there with a message of change - not that I believed - and guess what? Washington changed him! His administration is getting away with stuff that would have impeached GWB. No surprise that NADA is trying to block even Internet communications between Tesla and customers, block out of state car registrations if the car was not bought through a dealer.

The bad news for them is that Tesla technology and business model will disrupt the ICE age. Just like Netflix did to Blockbuster, etc. Or MP3 swept away all those record shops.

Elon Musk needs to focus on Model S, X plus the supercharger network to drive demand. Scale production to drive costs down with economies of scale. They have limited resources so they can not afford mistakes or waste of capital. Battery swap would be waste of engineering and capital resources.

ian | June 21, 2013

+ 1 Which is why they aren't going to open a bunch of swap stations. Just a couple to see how much it really gets used. I agree it's a distraction but I'm not Elon and don't pretend to have his intellect or vision. Perhaps he sees more than we do.

From his comments though, I don't think so. I think the future with larger packs and even faster (than even the recent bump up to 120kw) charging is the real answer to this unnecesary range anxiety most ICE drivers seem to have.

Exciting times ahead! I believe reason and Tesla will prevail in these battles.


Brian H | June 22, 2013

fcusinga | June 21, 2013
ELON please make a website where all supporters of TESLA can sing in.
count me in :) go tesla

What about those of us who can't ♫sing?♫

rmitchum | June 22, 2013

You will just have to hum?

risingsun | June 23, 2013

The fact is that car dealers make a ton of money fleecing consumers largely due to anticompetitive legislation. The payoff to car dealers from campaign contributions is very large.

akikiki | July 1, 2013


NumberOne | July 1, 2013

Well, I did sign the petition, and forwarded it to people I know. I also wrote to my state senator, right after the Virginia DMV commissioner rejected Tesla's application for a dealer license. It has been more than a month, and I just heard back, so it will take a while, but they do read their mail. The more letters and e-mails they get, the better, so do write if you are in a state with 'issues'!

TeslaRocks | July 3, 2013

As per TDurden...
So dealers make no profit on selling new cars but lots of profits on parts and service? Reminds me of printers and how they sell for so little compared to the toner and ink cartridges. I guess that is the way to enslave the world, low initial cost and high service fees. Glad Tesla sees things differently, with Elon saying that he thinks it's wrong to make money on service. This is why Tesla will come out on top and car dealerships will fail. You can't hide the truth from people anymore, with all the communication methods we have now.

akikiki | April 5, 2014

With all the recent talk about states blocking TM from selling direct and how dealerships will suffer, its time to bump this to the top again.

Recommend reading the link in the OP's subject.

Brian H | April 5, 2014

Yeah, it's a good one.