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Tesla Wins In China But Loses In Connecticut, With Tesla Pickup Looming

Good news, bad news for Tesla yesterday. China says it may soon lift the 40% tariff it imposed on cars imported from the US, and a judge in Connecticut has ruled the company is illegally selling cars at its store in Connecticut.

China has announced a major rethink of its economic policies, according to the Wall Street Journal. The new plan would provide more access to the Chinese market for foreign companies, a move that supporters of the current US president will hail as proof trade wars are indeed easy to win. But the devil is in the details and anyone who thinks the Chinese have decided to kowtow to America may have another thing coming once all the details are known.

One of the beneficiaries of Beijing’s new approach may be Tesla. According to a report by Bloomberg, China has proposed rolling back the 40% tariff in imposed on cars imported from America a few months ago. The move would return the tariff to 15%, where it was previously. Details are sparse, as the Bloomberg report is based solely on unnamed sources.

The 40% levy has made things hard on Tesla in recent months and forced the company to lower prices on many of its cars in order to compensate. News of the tariff rollback will be welcome but the timing is still very much up in the air. China has provided no details although its ministry of commerce released a statement yesterday saying,  China is “pushing forward the timetable and road map for the next stage of economic and trade consultations work.”

Connecticut Judge Rules Against Tesla

In 2017, the Connecticut Automotive Retailers Association petitioned the state’s Department of Motor Vehicles to prohibit Tesla from selling new cars at its store in the wealthy town of Greenwich. At that time, Tesla claimed the store was just a place where people could come to learn about its cars and then go home and order them online. A hearing officer for the DMV ruled in favor of the dealers but stayed enforcement of his decision so Tesla could pursue an appeal in court.

This week, a Connecticut superior court judge ruled that Tesla was in fact selling cars illegally at the Greenwich store. According to the Hartford Courant, the judge said in his ruling, “If Tesla was not engaged in the business of selling motor vehicles at the gallery, it’s difficult to see what it was engaged in at that location.”

Tesla has been trying for years to get the law in Connecticut banning auto sales except by franchise dealers changed, but the Automotive Retailers Association has so far bought enough members of the legislature to avoid lifting of the ban. It will make another attempt to get the law changed in the 2019 legislative session. Considering the unbridled success of the Model 3, car dealers have every reason to be afraid of what Tesla will do to their markets.

The ban is absurd, of course. It makes no more sense to prohibit sales of cars except through franchise dealers than it does to force people to buy cell phones, computers, table linens, or pitch forks through them. But legislators at all levels respond to bribes called “campaign contributions” rather than the public interest.

The Tesla Electric Pickup Is Coming

Those dealers may soon have even more reason to worry. In a tweet yesterday, Elon Musk indicated that a prototype of the Tesla pickup truck may be revealed sometime next year.

Model S luxury sedan, Model X luxury SUV, Model 3 midsize sedan, Model Y crossover (coming), Tesla Semi (on the horizon), and next a Tesla pickup? Soon, Tesla will have an all-electric answer for everything those dealers sell. Then it will be time to finally kiss the outmoded and anti-competitive franchise dealer model goodbye.

 
 
 
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Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we listened?

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