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Does the Dealer Association seriously think Tesla is doing a disservice to buyers?

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Model S 70D at the Tesla Store in Dedham, MA [Source: @Teslaliving]

Tesla Motors filed suit in the US district court against Michigan state officials after having been rebuffed in its quest to sell cars directly to customers. The suit asks the court to declare that Michigan’s franchise dealer law violates the due process and equal protection clauses of the Fourteenth Amendment to the U.S. Constitution as well as the Commerce Clause.

At the time the suit was filed, a spokesperson for the company said, “Solving this legislatively always has been and continues to be Tesla’s preferred option. For the last two years, Tesla has pursued legislation in Michigan that is fair to everyone and that would benefit Michigan consumers.”

Now Jeff Carlson, chairman of the National Automobile Dealers Association (NADA) has responded to Tesla’s legal action. Speaking to the Automotive Press Association, Carlson said policymakers should consider what customers want above all else. He is convinced that buyers want lower prices first and foremost.

As quoted in The Detroit News, Carlson said, “They can continue to support the franchised dealers who discount up to $700 … or … they can offer the consumer a vertically integrated model that prices vehicles at retail. The public policymakers are going to go to the consumers and say, ‘Which one do you want, the discounted product or the product at retail?’ I think they’ll make the right decision.”

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In support of his position, Carlson cited a 2015 Phoenix Center study that found competition among dealers often results in discounts of hundreds of dollars. He is convinced that, given a choice, car buyers would prefer to do business with a dealer rather than a company that sells direct and does not negotiate prices.

Carlson seems to think that people love to drive from dealer to dealer to haggle over prices like rug merchants in a bazaar. He thinks they enjoy the games, the gimmicks, and the gymnastics buyers have to go through in order to get a dealer’s best price. Endless shuffling back and forth to manager. First pencil, second pencil, the full panoply of tricks and cajolery designed to do one thing and one thing only — avoid discounting the price of the car any more than necessary to make the sale. In the business, it is known as “holding gross” and it is the holy grail of the car business.

Decades worth of data show that people usually buy from a dealer located within 25 miles of home. Nobody wants to drive 100 miles to save a few hundred dollars. They want to buy from a local dealer who will give them good service. Dealers know this and use it parry any suggestion by a customer that they are going to go “shop around.” Some do but most don’t. They do the dance for a little while, then buy the car from the nearest dealer.

The favorite expression in the business is, “It’s not the deal you got; it’s the deal you think you got.” Car dealers negotiate prices every day. Customers negotiate prices once every three to four years. Who do you think is going to win the battle most of the time?

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Studies show that most customers hate to haggle. They would rather have a root canal than arm wrestle with a car dealer. Mr. Carlson wants to offer people a choice — negotiate the old fashioned way or pay the price on the sticker. And he thinks the majority of people will choose haggling? What universe are you from, Jeff Carlson?

The arrogance of the franchise dealers is astonishing. They actually believe they are performing a valuable community service and are loved by their customers. In reality, they are an illegal monopoly that is conspiring to keep prices as high as possible.

If dealers only demonstrated a sliver of interest in promoting electric cars, perhaps they would have some credibility. But they don’t. They park their plug-in hybrids and electrics out back. They never charge the batteries and they try every trick they know to switch people away from an EV and toward a conventional car.

Dealers and manufacturers make their living building and selling conventional cars so they have no interest in making less money. They can’t be bothered with plug-ins and electrics. Jeff Carlson is dead wrong when he says customers prefer being raked over the coals by dealers. Ask people what they want and they will tell you they prefer never to have to haggle with a car salesman ever again in their lifetime.

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"I write about technology and the coming zero emissions revolution."

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Investor's Corner

Lucid denies rumors of bankruptcy after over 40% stock drop

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Credit: Lucid

Electric vehicle maker Lucid Group has denied rumors of an imminent bankruptcy after a report from this morning sent the stock on a dramatic drop on Wall Street, seeing losses of more than 40 percent during trading hours.

Lucid’s Director of Communications, Nick Twork, responded to the report from Eletric-Vehicles.com, which stated the company’s restructuring advisor, AlixPartners, was asked to review two decisions: taking Lucid shares private or filing for Chapter 11 bankruptcy protection.

The report also claims AlixPartners told the Lucid board to “concentrate on Gravity production while improving its quality, and to temporarily hold back the Lucid Air, the sedan that has defined the company since its launch.”

Twork said:

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Shares rebounded after the response to the report, halving its losses as the trading day neared 3 p.m. Eastern.

Lucid has struggled to get its sales off the ground and into more respectable numbers, but the company is in its early years, when things are hard to begin with. It is also backed by several notable investors, including the Saudi Public Investment Fund (PIF), which has nearly limitless money and likely would not ditch an investment of this size so soon.

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Lucid shares were down just 14 percent at the time of publication, a far cry from the 55 percent its losses topped out at during the day.

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Tesla owner attempts resale of Model S Signature Edition for over $260k

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Credit: Tesla

A Tesla owner who purchased a Model S Signature Edition, one of the final 250 units of the all-electric flagship vehicle that the company discontinued earlier this year, is attempting to sell the car despite a no-resale clause that prohibits reselling for the first year.

The car is being sold by J&S Autohaus in Ewing, New Jersey, and is priced at $260,490, well above the $159,420 that Tesla sold it for earlier this year.

To those who do not know, the Model S Signature was a highly exclusive, limited-run farewell variant of the Model S Plaid that was produced this year to mark the end of production of both the Model S and Model X, Tesla’s two flagship vehicles.

Limited to just 250 units with invite-only sales, it serves as a collector’s item celebrating the legacy of the Model S, which helped pioneer Tesla’s electric vehicle success since its 2012 launch.

It bundles top-tier performance with bespoke cosmetic and luxury upgrades, plus Tesla’s Luxe Package. Here’s what the Model S Signature has over the typical Model S Plaid:

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  • Exclusive Exterior – Unique Garnet Red Paint, matching door handles, gold Tesla “T” badges upfront, gold Plaid and Signature badging at the rear.
  • Premium Interior – White Alcantara upholstery with gold piping/accents, gold Plaid seat badges, Signature-marked door sills, individually numbered dashboard plaque, gold puddle lights, special interior lighting sequence, and a custom Signature key fob.
  • Performance Upgrades – Carbon-ceramic brakes with gold calipers
  • Bundled Luxe Package – Full Self-Driving (Supervised), four years of Premium Connectivity, free lifetime Supercharging
  • Performance Metrics – ~1,020 horsepower, sub-2-second 0-60 MPH, ~390-mile range

Tesla quickly introduced a No Resale Agreement for the Signature Editions of the Model S and Model X, which would penalize the seller for “the amount of $50,000 or the value received as consideration for the sale or transfer, whichever is greater.”

The company continues:

“If you sell or otherwise transfer the ownership of your Model S or Model X, the remainder of the Recommended Maintenance, Wheel and Tire Protection Plan, and Windshield Protection Plan will transfer automatically to the buyer. The Full Self-Driving (Supervised), Free Supercharging and Premium Connectivity will not transfer with the vehicle and will terminate once the ownership of the Model S or Model X is transferred.”

Tesla will likely come after the seller, especially as it has been about two months since Tesla launched deliveries.

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Tesla Full Self-Driving v14.3.5 Early Impressions: new features and early performance

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Credit: TESLARATI

Tesla rolled out Full Self-Driving (Supervised) v14.3.5 yesterday, and about fifty miles of driving on the new version has given me enough time to highlight what seems to be strong about the release and what is not.

Additionally, Tesla has added a few new features with this specific update, which we’ll highlight as well.

Tesla Full Self-Driving v14.3.5 Performance

The new update is business as usual. Things seem to be running completely normal and necessary, but there are a few things that we’ve seemed to pick up on based on our own experience with v14.3.5, as well as what other users are seeing.

Initially, it seems to be more aware of its surroundings, making moves that are incredibly courteous to other drives and operating just a tad more reserved than what the suite might have done previously.

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We had two instances where it showed this, the first being FSD needing to pass a Flagger Force vehicle that was placing down signage for the day. Their work truck was right at the front corner of a right-hand turn; typically where most cars travel when they take that turn.

FSD v14.3.5 recognized this, slowed down, and took the turn wide with no issues:

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Additionally, v14.3.5 backed up for a semi truck that was making a wide turn onto a road my car was on. This is not new, but it seemed to be backing up for courtesy; it didn’t seem completely necessary, but it might have put some peace of mind in the truck driver’s head:

X user Mike P, also a Pennsylvania native like myself, shared three clips of his Tesla running v14.3.5 performing similar maneuvers. He said:

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“FSD turns right into a small alley that only fits one car at a time, sees oncoming car, reverses out of alley to make space, realizes oncoming car is actually parking, re-enters alley.”

Check it out here:

It seems like Speed Profiles are still in need of some tweaking; I am adjusting what Speed Profile I’m in frequently, constantly changing it to get it to travel at the correct speed. This was an issue for me on v14.3.4. It seems like they’re just a little inconsistent.

Terrible Parking

Parking attempts on v14.3.5 were not good. There are quite a few people who have said this:

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David Moss, the Tesla owner who has taken multiple coast-to-coast drives without any interventions, also has had some issues with parking early on with v14.3.5:

New Features

Tesla has added the ability to open Camera Preview at any time. Previously, it was only available in Park. Here’s what that feature looks like in action:

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Check back later this week for a longer review of what we’ve noticed on Full Self-Driving v14.3.5.

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