Car dealers continue to try to screw Tesla (and Tesla customers)

  • Published on September 18th, 2017

The California New Car Dealers Association has expanded its complaint against Tesla over the modern electric car pioneer’s use of customer referral programs. The California New Car Dealers Association has sent yet another letter to the state’s Department of Motor Vehicles explaining how cruel and unfair Tesla’s approach is.

Tesla model 3 first deliveriesBy James Ayre

The new complaint specifically addresses Tesla’s 6 newest referral program offers and alleges that the practice violates California state law.

This newest letter follows earlier ones sent in August 2015 and September 2013. The California Department of Motor Vehicles, for its part, is known to have sent Tesla a “warning letter” of sorts in September 2015 relating to certain company practices. Good thing the dealership association is so proactively looking out for California’s unfortunate residents.

Background: Tesla vs auto dealers: Round one goes to Tesla for right to sell direct to consumers

Automotive News provides more: “The CNCDA claims Tesla’s various referral programs engage in ‘bird-dogging’ practices, enticing owners with incentives to act as unlicensed sales people. California law states that it is illegal for a company to offer rebates, discounts or commissions to anyone without a sales license on the condition that they sell, or aid in the selling, of that company’s goods.”

“Tesla continues to widely publicize its now years-long strategy to sell cars using current customers as the middlemen,” argued Brian Maas, president of the CNCDA, in the letter.

Oh, what a crime! How is it that this is still happening?

More seriously, that’s a bit of a strange way to interpret the situation, but I suppose that an argument can be made … sort of. Who would genuinely believe it’s a problem, on the other hand, is a bit of a mystery.

Tesla issued a statement in response: “This is just another example of car dealers trying to interfere with us and our customers. The regulations prohibit rogue car salespeople. Does anyone seriously think our customers are salespeople that the public needs to be protected from?”

It should be remembered, though, that it doesn’t matter if “anyone” believes that — only if regulators or legislators do.

The Automotive News coverage continues: “The program at issue in 2015 offered $1,000 for each new buyer referred by an owner, and new buyers would receive $1,000 off the price of a vehicle. Tesla received similar complaints about the same program in Virginia, and eventually modified it to offer the full $2,000 to the buyer.

“The most recent complaint lists six programs introduced this year, and claims the short duration of each offer is intended to avoid enforcement against illegal sales practices. One such program is referred to in the letter as the ‘Secret’ referral program, which allows owners to ‘unlock’ new levels of incentives with a certain number of referrals. Rewards include free supercharging, a $1,000 discount on a Model S or Model X and ability to purchase the next-generation Roadster — which has yet to be introduced — at a 10% discount.”

Notably, the California DMV has begun looking into the validity of the allegations in the letter, according to a statement from a spokesperson.

Here’s to hoping that they move onto something more important without wasting too much time on this, like perhaps going after auto dealerships for some of the fraud they seem to so often be involved in.

(Originally appeared at our sister-site, Cleantechnica. Check out their new 93-page EV report.)


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  • No one can screw Tesla customers better, or more often, than Tesla Motors herself.
    Consider their strategy for the Model 3. Advertised as a “$35,000” vehicle, that model
    was given a paltry 220 mile drivng range, consciously sized to be less than a Chevy Bolt
    (which actually CAN be bought for $35,000) so that Tesla buyers would feel the need to
    protect their car from derision from Bolt owners by buying the “battery upgrade” at
    a price of $9,000. Analysts have demonstrated that Tesla’s cost for the battery cells
    required for that upgrade cost them all of $3750. Now THAT is yet another in the long list of Tesla pricing that screws their willing customers – check out their proprietary collison repair service, or their “maintenance” service that is required, and its outrageous cost

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