As part of my ongoing beratement of the seemingly clueless bureaucrats and politicians in Iowa involved in the cancellation of part of the September test drives conducted by Tesla Motors, I recently emailed Paul Steier, the Director of Iowa’s Bureau of Investigation & Identity Protection, part of the state’s Department of Transportation.
Below is my email thread with the Iowa DOT (I apologize for the length of this post, but I wanted to include each volley out of respect to the Iowa DOT, Paul Steier, and Mark Lowe).
Dear Mr. Steier:
Because you’re mentioned in the following blog post, Tesla Bigot: IADA’s Bruce Anderson, I wanted to share it with you. Although I don’t mention you in other blog posts regarding the issue of the legitimacy and legality of Tesla test drives and sales in Iowa and Michigan, you may be interested.
This issue isn’t going to simply disappear. Consumers deserve options and Tesla deserves to sell in the state of Iowa (and offer test drives). Allowing foreign companies like Toyota, Kia, and Range Rover to conduct test drives and sales, but not a company like Tesla that employs 6,000 hard working Americans, is really short-sighted. Citing existing laws is endorsing stupidity. You folks are establishing a legacy for yourselves—and future generations won’t view it in a positive light.
In response, I received the following email from Mark Lowe, Director of the Motor Vehicle Division at the Iowa Dept. of Transportation [I apologize for the lack of paragraph breaks]:
Dear Mr. Robbins,
Paul Steier, Director of our Bureau of Investigation & Identity Protection, shared with me your recent blog regarding cancellation of the Tesla sales event in Iowa. Although you have every right to debate the merits of Iowa’s motor vehicle sales and dealership laws, I feel compelled to defend Mr. Steier against your suggestion that he lacks intelligence or ethics. Mr. Steier is a highly intelligent, ethical person who provides valuable service to Iowa citizens every day by helping to protect them against identity, vehicle, and other consumer frauds. In this instance, Mr. Steier was interpreting Iowa law exactly as it was and is currently written — Chapter 322 explicitly prohibits engaging in the business of selling vehicles without a dealer’s license, and section 322.2(7) of the Iowa Code defines being “engaged in the business” as “doing any of the following acts for the purpose of the sale of motor vehicles at retail: acquiring, selling, exchanging, holding, offering, displaying, brokering, accepting on consignment, conducting a retail auction, or acting as an agent for the purpose of doing any of those acts.” In this instance, Tesla was clearly engaged in the business of selling motor vehicles — in addition to displaying vehicles by offering test drives for the purpose of inducing sales, Tesla representatives were encouraging and helping customers to complete actual sales transactions. In addition, section 322.2(14) specifically prohibits a manufacturer from acting as a dealer in Iowa. When contacted during the event, neither the Tesla representatives at the event nor Tesla’s counsel disagreed that Tesla was engaged in the business of selling motor vehicles without a required dealer’s license in contravention of Iowa law. The provisions of Chapter 322 that prohibit engaging in the business of selling motor vehicles without a dealer’s license are mandatory and may not be waived by the Iowa Department of Transportation, and Mr. Steier is obligated to explain and enforce the law as it is currently written. Thank you.
Director, Motor Vehicle Division
Iowa Dept. of Transportation
Unlike Iowa Senator Matt McCoy and Rep. Peter Cownie, Mr. Lowe has actively engaged me in constructive dialog regarding the cancellation of the September test drives conducted by Tesla Motors.
Below is my response to Mr. Lowe:
Dear Mr. Lowe,
I appreciate you taking the time to respond to my email to Mr. Steier and my blog post regarding the cancellation of Tesla’s test drives in West Des Moines in September.
Apparently it is Iowa’s antiquated laws that are hurting consumers and unfairly penalizing Tesla Motors, not Mr. Steier’s actions. However, I respectfully argue the issue of whether Tesla was “selling” vehicles at the test drive event. If Iowa’s law is so backward and poorly phrased that it illogically defines “displaying” as sales, then I suppose you have me—and thousands of Iowa citizens who desire to learn more about Tesla’s vehicles—on a technicality.
Thus, I’ll cease picking on Mr. Steier and instead pester you and Governor Branstad. When will Iowa’s leadership do the right thing for its citizens, economy, and environment and change its archaic laws, allowing tax-paying voters to do something as simple as test drive a 21st century all-electric vehicle?
In response, Mr. Lowe sent the following:
I think there are several things to consider. One is that the purpose of displaying an auto is of course to encourage and facilitate its sale, but beyond that, and probably more importantly, the law has tried to protect consumers by helping them know who they are dealing with and where to seek recourse should something go wrong, either with the mechanics and operation of the vehicle itself or the clear title to the vehicle. Vehicles, particularly in a rural state like Iowa with fewer public transportation options, are a major investment for most citizens and a key to personal and professional mobility — obtaining a vehicle that is not fit for operation of that cannot be registered can be a major disruption personal and professional disruption for most people [sic]. Much of what is in Chapter 322 is designed to protect citizens against someone blowing into town, unloading mechanically unfit vehicles and/or vehicles that cannot be titled clearly, and then vanishing into the night. This is not to suggest that Tesla was doing that, but only to say that broadly defining sales, requiring persons selling vehicles to have a license and requiring them to declare their places of operation has helped protect consumers from unscrupulous sellers. (Consider, for a moment, the prospect that someone wholly unassociated with Tesla could obtain a hotel conference room, display a Tesla vehicle from the hotel room and offer test drives to perspective customers, and then induce down payments for orders never go be delivered on [sic]. These are the kinds of activity our dealer laws have long sought to protect people from.)
None of this is to say that laws long in place cannot be reviewed to determine whether they are keeping pace with current markets and means of doing business, but is only to say that there are important consumer protection issues that should not be overlooked in the review.
Director, Motor Vehicle Division
Iowa Dept. of Transportation
Dear Mr. Lowe:
I appreciate your quick response and attention to this issue. I agree wholeheartedly that consumer protection is of paramount concern. You and every one of the appointed or elected officials with any influence whatsoever over issues concerned consumers in the state of Iowa should take this issue seriously. I’m glad to see that you do.
I agree that Iowa—and every state in the U.S.—should have laws that, as you state, “protect citizens against someone blowing into town, unloading mechanically unfit vehicles and/or vehicles that cannot be titled clearly, and then vanishing into the night.” Bravo (none of my trademark cheeky cynicism implied). This is exactly what government and persons such as yourself and Peter Steier should be working to achieve and maintain.
However, your next statement reads, “This is not to suggest that Tesla was doing that, but only to say that broadly defining sales, requiring persons selling vehicles to have a license and requiring them to declare their places of operation has helped protect consumers from unscrupulous sellers.” I would agree. But do you, Mr. Steier, or anyone else at the DOT perceive Tesla Motors to be an “unscrupulous seller”? This award-winning and revered company has sold tens of thousands of its vehicles around the world. From what I’ve learned in my research, most of Tesla’s customers are not only satisfied, but many are evangelists or zealots.
However, I take issue with your statement that, during the test drives, “Tesla was clearly engaged in the business of selling [my emphasis] motor vehicles.” I noted your opening volley: “…your recent blog regarding cancellation of the Tesla sales event [my emphasis] in Iowa.” You label the test drives a “sales event.” But no vehicles were sold. Not only that, but Tesla didn’t attempt to sell vehicles. I recognize, understand, and respect your role and duty in protecting the consumers of Iowa, Mr. Lowe (such protection is part of what makes America one of the greatest nations on earth). Truly.
But to label Tesla’s West Des Moines test drives a “sales event” flies in the face of logic and reality. Simply because Iowa’s old school laws define such an event as “sales” doesn’t necessarily make it so. Why would one of the world’s most innovative and intelligent companies purposefully sell vehicles in violation of Iowa’s laws? Should we suppose that Tesla employs no corporate attorneys or never consults them prior to promotional activities in conservative states like Iowa?
Closing on a positive note: Thank you for your engagement on this issue. Bruce Anderson, president of the Iowa Automobile Dealers Association, as well as Senator Matt McCoy and Rep. Peter Cownie, haven’t responded to my numerous attempts to engage them in a constructive dialog regarding the rationale behind the cancellation of the September Model S test drives. I understand Mr. Anderson’s refusal to respond: He’s the hired gun of Iowa’s auto dealers and clearly a special interest. I’m disappointed, however, that Senator McCoy and Rep. Cownie remain silent (although I understand that, as a citizen of Ohio, I am owed nothing by them). Mr. Anderson owes nothing to the people of Iowa. Senator McCoy and Rep. Cownie, however, are beholden to their constituents and the voters who elected them to office.
It seems Mr. Lowe is the only one with the integrity to actually engage me in a dialog to, hopefully, push Iowa’s laws into the 21st century and better serve its citizens. While the protection of Iowa’s consumers is critical, the penalization of those same consumers (who might desire to test drive or purchase an electric vehicle) is both harmful and highly ironic.
I applaud Mr. Lowe for taking the time from his day to engage with me and describe the rationale behind the decisions of Paul Steier and the Iowa DOT.
Hopefully this is the beginning of a constructive dialog that will eventually result in the revision of consumer protection laws in the state of Iowa and the advancement of the state’s transportation infrastructure.
Are you paying attention, Michigan?