The California Department of Motor Vehicles is warning Tesla that its "referral program" offering incentives to help sell cars is against state law, the Sacramento Bee reports:
In his letter to Musk, Frank Alvarez, chief of DMV's Investigations Division, said the Tesla program "violates California laws." He described the Tesla offer as "a practice commonly referred to in the vehicle sales industry as offering 'bird dog fees.' "lvarez goes on to allege specific violations, citing the California Automobile Sales Finance Act, which says it is "unlawful for any seller to induce or attempt to induce any person to enter into a contract subject to this chapter by offering a rebate, discount, commission, or other consideration, contingent upon the happening of a future event, on the condition that the buyer either sells, or gives information or assistance for the purpose leading to a sale by the seller of, the same or related goods."
The letter also alleges multiple Vehicle Code violations, including a person acting as a vehicle salesperson without a valid DMV license or temporary permit.
The letter notes: "This is a written warning. The violations must be corrected. Any repetition of the violations may result in an administrative accusation being filed against your corporation's manufacturer and dealer licenses, and referral of the matter to prosecutors without further warning."
It's hard for me to see how California's government is doing much good by preventing Tesla from offering price breaks on its cars. What's next? Will the state go after the federal government for offering a tax break for electric cars? At this point, it's almost predictable that if you are new company trying new things in an established industry, the government will come after you somehow.