Pub. 56 2015-2016 Issue 3

36 not appear to spend their monies on the television, radio or newspaper. Tesla’s sixth justification is that it claims to sell its vehicle without marking up the price and thus it must sell direct. It is the unusual vehicle sale in a dealership that sells for the stated manufacturer’s price, i.e., the MSRP. Competition and choice give a consumer negotiating power–options not available in Tesla’s current pricing and distribution model. The Tesla dis- tribution model is again one price from both the producer and the seller; consequently, there is no competition and no consumer choice–reasons to oppose Tesla’s distribution model. Tesla’s final argument for their distribution model is that the electric vehicle should entirely replace the gasoline-powered vehicle and they are the only entity which can communicate this message. Tesla’s concern regarding a conflict of interest for a dealership selling gasoline and electric vehicles is unjustified. A franchised dealership looks to the needs of their consumer–whatever those needs may be. To suggest that a dealership cannot take care of an electric vehicle customer as well as a customer who wants a hybrid vehicle, such as the Chevrolet Volt or a Porsche Panamera S EHybrid, or an electric Nissan Leaf in the same dealership that is selling gasoline-powered vehicles is inaccurate andmost importantly, contrary to sales history. Whether the electric vehicle should entirely replace the gasoline- powered vehicle is a decision best left to the consumer–not the manufacturer of that product. Consumer choice involves weighing their vehicle options and deciding which vehicle is best for them–a van, coupe, truck, SUV, hybrid, electric, or gasoline vehicle, to name but a few of the available vehicle options. None of Tesla’s stated reasons for demanding an exception to a state’s proven dealer distribution system give rise for an exception. In fact, their rationale limits consumer choice and competition. Tesla’s reasons are Tesla-centric not consumer-centric. Although Texas does not provide for a manufacturer or dis- tributor to directly or indirectly own an interest in a dealership; operate or control a dealership; or act in the capacity of a dealer, Texas does recognize an exception. This statutory exception is for the purpose of allowing a manufacturer or distributor to broaden the diversity of its dealer body and enhance opportuni- ties for qualified persons who are part of a group that has been historically under-represented in the dealer body. 70 Another statutory exception is allowed if a person is qualified, according to the manufacturer’s and state’s enumerated require- ments, but lacks the resources to purchase a dealership outright. 71 In these exceptions, a manufacturer or distributor may tem- porarily own an interest in a dealership if their participation is in a bona fide relationship with a franchised dealer who has made a significant investment, subject to loss; has an ownership interest in the dealership; and, operates the dealership under a plan to acquire full ownership within a reasonable time and under reasonable terms. 72 ©2014 Texas Mutual Insurance Company Safety and Dividends Go Together Like Drivers and Roads . How can safety drive your dividend? Ask your agent or Brad Wicker at (877) 694-2537 or bwicker@nts-online.net . We’re helping auto dealers rev up their bottom line with group and individual dividends for companies who keep their people safe. Plus, as a member of the Lone Star Auto Dealers Safety Group , you may receive a greater discount on your workers’ comp premium. We’re helping our policyholder owners be safer and stronger—and we think you’ll find it very rewarding. ©2015 Texas Mutual Insurance Company While we can’t guarantee dividends every year, Texas Mutual has returned $1.8 billion to safety-conscious policyholder owners since 1999.  DEALER FRANCHISE — CONTINUED FROM PAGE 35