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“Let Tesla Direct Sales Be,” says Letter to the States

Tesla Motors sells direct at a Tesla Store, much to the ADAs' dismay.
Tesla Motors sells direct at a Tesla Store, much to the ADAs’ dismay.

Americans have a love / hate relationship with Tesla direct sales model, but it depends on if you’re a buyer or not.

Specifically, it depends on if you are a buyer or an automobile dealership. Most buyers love buying direct from Tesla Motors, whether online or in a Tesla Store, even giving the Tesla Model S a 99:100 Consumer Reports Rating, a feat never before seen in any automobile.

On the other hand, most state and regional Automobile Dealer Associations (ADA) don’t like direct sales one bit. First, it is illegal, in many states, for any automaker to sell direct to the consumer, particularly when they would be selling right alongside franchised dealers. One might figure that, since Tesla Motors has no franchises, the law wouldn’t apply. In states where it isn’t so clear cut, the ADAs have moved to block the direct sales of the Tesla Model S, with some degree of success.

Consumer petitions, to allow Tesla direct sales, have gone as far as the White House, to which the Obama Administration replied, more or less, that it is a state issue and that the fed wouldn’t get involved. In an effort to push the states to act on this issue, a number of political, green, and consumer groups have gotten together to write a letter. All told, an odd menagerie of eight groups, including Sierra Club, Americans for Prosperity, Consumer Federation of America, Environment America, and the Information Technology and Innovation Foundation, to name a few, have basically told the ADAs that they’re not part of the solution for a greener America, nor a more prosperous America.

Among a few choice quotes from the letter, the groups explain that current laws “retard innovation by making it harder for new technologies to achieve wide distribution and hence reach an adequate scale to be sustainable in the market.” Additionally, the organizations wrote, current laws prohibiting Tesla direct sales, or any automaker direct sales, for that matter, “have negative consequences for the entire automotive industry — including what kinds of cars are built and sold, how they are powered, and what innovative new technologies can reach the market.” Interestingly, it is only the United States that is home to such archaic laws, and yet they stand. Will this letter make any difference? Will the ADAs or state regulators see that direct sales is actually better for everyone?

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  1. why do the auto dealer associations fear tesla so much when telsa sales are neglible? i suspect they are receiving some funding and direction to stop tesla sales from oil companies who have FAR more to loose if telsa succeeds

  2. There are other countries with many archaic laws, but the US is still strange. One of the most free economies, and yet such limitations on sales. One of the most free societies, yet unenforceable, unconstitutional religious discrimination in state constitutions. I’m confused.


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