Time for the REAL Tesla Takedown

Why are Elon and Trump Freaking out over the Tesla Takedown events?

Hypothetical Estimate (rounded for simplicity):

• Musk has 100 million shares pledged

• Tesla stock price = $250/share → Total pledged value = $25 billion

• At 25% LTV, he could borrow up to $6.25 billion

• A margin call would likely be triggered if the value of the pledged shares falls to ~$6.25B / 0.25 = $25B, meaning a drop of ~33% in the pledged stock’s value

Tesla drops below $167/share:

• If pledged at $250/share, a ~33% drop = $167/share

• Below that, Musk may face a margin call, forcing him to:

  • Deposit more collateral (more shares)

  • Repay part of the loan

  • Or sell shares

Tesla drops below $80–90/share:

• Tesla stake = ~$33 billion

• If a large chunk is pledged, and prices fall 65%+ from the pledge point, margin calls and forced sales likely begin.

• Combined with the illiquidity of private holdings, this could strain Musk’s ability to meet short-term obligations.

Tesla drops to $50/share or below:

• Tesla stake = ~$20 billion

• At this level, his margin loans are deep underwater.

• Combined with debt from other ventures and limited liquid cash, he might be unable to repay lenders.

• Selling more stock could further depress Tesla’s price, creating a downward spiral.

• If SpaceX funding dries up or cannot be monetized quickly, he could face personal insolvency risk.

Furthermore, at around $50/share or lower, Musk’s Tesla stake would likely no longer cover his liabilities and:

• Margin calls are already in effect.

• Stock sale proceeds can’t cover total debt.

• His personal cash flow may not support obligations.

• He can’t easily or quickly monetize private assets like SpaceX.

At this level, bankruptcy becomes a real possibility—if liquidity dries up, lenders don’t cooperate, and no white knight investors step in.

How does Tesla Sell cars?

1. Direct-to-Consumer Model

Tesla bypassed dealerships by selling cars directly to consumers Online and through company-owned stores (often called “galleries” in states with stricter franchising laws). This cuts out the middleman, which was both a business strategy and a legal workaround to franchising laws in nearly every state.

2. Exploiting Loopholes and Legal Grey Areas

In some states, Tesla found loopholes or gaps in the existing franchise laws:

• Some laws prohibited manufacturers from competing with their own franchisees, but Tesla never had franchisees, so the laws didn’t technically apply.

• In other cases, laws didn’t explicitly ban direct sales, so Tesla pushed the limits until challenged.

3. Lobbying and Legislative Battles

Tesla has aggressively lobbied in state legislatures to change or amend laws. In some states, this resulted in:

• Partial exemptions (e.g., a limited number of direct-sale licenses)

• New legislation that explicitly allowed Tesla’s model

Example: Tesla could continue operating a few direct-sale locations in New York after a deal with the state, even though new ones were restricted.

4. Creative Storefronts (Galleries vs. Dealerships)

In states where sales were banned, Tesla opened “galleries”:

• You can view the car, ask questions, and learn about features.

• But you can’t purchase the vehicle at the location. You must order it online (which is legal almost everywhere).

This let Tesla build brand awareness and funnel sales through its website while technically not violating dealership laws.

5. Challenging Laws in Court

Tesla has also taken legal action, arguing that the franchise laws:

• Violate the Commerce Clause or are anti-competitive

• Restrict consumer choice

In some cases, this led to favorable rulings or settlements.

6. Leveraging Public Support

Tesla leveraged its popular brand and strong customer support to influence public opinion and lawmakers, painting dealership laws as anti-innovation and anti-consumer. We are changing this perception and, with it, the justification for his exemptions.

We need our state congressmen and governors to remove the legal loopholes and creative workarounds used by Tesla by leveraging our newfound public support. Tesla should no longer be allowed to get around or weaken state franchise laws. The company should no longer be allowed their legal exception that puts every other traditional automaker at a disadvantage.

How to fight Tesla

(what we want our lawmakers to do):

1. Amend State Franchise Laws

Push state lawmakers to amend laws to explicitly prohibit direct-to-consumer (DTC) sales, including online orders, and require all new vehicle sales to go through a licensed franchised dealer.

2. Restrict Vehicle Delivery

Block delivery of the vehicle unless it comes through a licensed in-state dealer.

4. Impose Consumer Protection or Licensing Requirements

Enforce licensing, titling, or consumer protection laws in a way that makes online-only car sales very difficult or prohibitively expensive.

For example, all car purchases must involve an in-state, licensed sales agent or location.

Why these measures need to be taken:

Selling NEW cars online undermines the long-standing legal, regulatory, and economic frameworks designed to ensure fairness, accountability, and consumer protection in the automotive industry.

1. Consumer Protection and Local Accountability

• Franchise dealerships are licensed and regulated within each state, providing localized accountability.

• Consumers can deal with a physical location in case of warranty issues, lemon law claims, or disputes.

• Online-only sales make it harder for consumers to resolve problems quickly and locally.

2. Regulatory Oversight

• Dealers are subject to strict state oversight regarding advertising, pricing transparency, paperwork, and fair dealing.

• Direct online sales bypass or weaken these protections, making enforcement of consumer rights more difficult.

3. Market Structure and Fair Competition

• State franchise laws prevent vertical integration, where manufacturers control production and retail.

• Allowing Tesla to sell new cars online while other automakers must use independent dealers creates an uneven playing field.

• It could incentivize other manufacturers to abandon the franchise model, disrupting a structured and regulated market.

4. Protection of Local Economies and Jobs

• Franchise dealerships are major contributors to state and local economies, employing hundreds of thousands of people.

• Shifting to a direct-to-consumer online model threatens these jobs and undermines businesses that operate under current legal expectations.

5. Tax Collection and Compliance

• Licensed dealers handle vehicle titling registration and collect and remit sales tax in accordance with local law.

• With direct online sales, there are concerns about inconsistent compliance and potential loss of state tax revenue or DMV oversight.

6. Precedent and Industry Stability

• If Tesla can continue selling new cars directly online, it could set a precedent that could lead to widespread abandonment of the dealership model.

• This is a risk to industry stability, with long-term economic and regulatory consequences.

We need to let our local state Senators, Congressmen and Governors know that we want Tesla’s preferential treatment to stop, why it needs to stop now and how we want them to stop it.