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Dear Tesla Motors Fans, “You Have to Resolve This On State Level.” Sincerely, The White House

Tesla Motors Direct Sales Won't Get Federal Help
Tesla Motors Direct Sales Won’t Get Federal Help

Unlike every other automaker in the United States (we say US, because no other country on the planet has such ridiculous protectionist laws) Tesla Motors does not sell its cars through a franchised dealer network.

If you want to buy a Lexus CT 200h, for example, you don’t buy from Lexus itself, but from a dealership that’s bought into the franchise. If you want to buy a Tesla Model S, you go to a Tesla Store, which is owned and run buy Tesla Motors itself. This means that Tesla Motors sets the prices, and the price you see is the price you pay. In fact, you can go online and spec out your Tesla Model S, knowing the price you see on the page is the price you’ll pay, no matter where you happen to live.

Some automobile dealer associations (ADA) have pressured their states to disallow such direct-sales tactics, saying it undermines the automobile dealerships ability to sell (and screw over?) the consumer. Interestingly, Consumer Reports notes that people actually LIKE buying direct from Tesla Motors, the first-ever 99:100 rating including dealership and service center experience. Some states, such as California and Washington, are allowing Tesla Motors direct sales, albeit with some difficulty in in states like New Jersey, Ohio, and Pennsylvania. Buying a Tesla in Texas, on the other hand, is more like imported hooch in the days of prohibition.

For anyone following closely the fight between Tesla Motors and various ADAs, some may have been thinking only an “act of Congress” would bring a definitive end to the dispute. Unofficially, even the Federal Trade Commission has said the ADAs wouldn’t have anything to fear if they’d just step up their own game. Petitions and public outcry notwithstanding, the Obama White House has finally given its official response, in a word “No.” The response further reads, “…laws regulating auto sales are issues that have traditionally sat with lawmakers at the state level. We believe in the goal of improving consumer choice for American families, [but] …pre-empting current state laws on direct-to-consumer auto sales would require an act of Congress.

If I understand this correctly, then, the final action is the consumer. Those who want Tesla Motors to sell direct need to speak using their wallets. Buy direct and leave the dealerships wondering where their customers went. Capitalism would, theoretically, weed out the rest, right?

Photo credit: joeymink

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  1. Free enterprise, Competition, and then Antitrust – in that order.  Worked for Standard Oil and ATT.  Though EV’s are still tethered to the AC grid (the reason for abandoning the EV1 in California), auto manufacturers should just “belly on up to the bar” and build better and more EVs.  After all, the engineering secrets are all out and open to the public.  It’ll lower gasoline consumption on one hand, but increase the use of the AC grid (and slightly increase oil consumption on the other hand – if the EV1 killers where correct).


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