After a recent decision to ban the direct-sale of automobiles to consumers in New Jersey, Tesla Motors CEO Elon Musk published an open letter explaining just what’s what.
We’ve been covering Tesla Motors’ success and failure with its direct-sales model for a while now, and it’s pretty easy to see who the automobile dealer associations (ADA) are interested in protecting. First of all, automobile dealers are franchises of the automakers they buy into. After spending millions of dollars to build, equip, and train personnel on a specific brand, it only makes sense that the automakers themselves shouldn’t be allowed to undersell the dealers on the very same vehicles. That’s the point of the franchise laws that are in place. Interestingly, no other country in the world has these laws.
Why Tesla Motors should be affected by any of these laws is beyond any logical mind, but the ADAs have used their considerable financial and political weight to twist the law to force Tesla Motors out. You see, Tesla Motors has no franchises, but the ADAs don’t see it that way. Supposedly, the ADAs say they are blocking direct-sales for the protection of the consumer. However, no amount of fuzzy math and smooth talk can cover the fact that the ADAs are simply protecting themselves.
If you look at customer satisfaction ratings for dealers and Tesla Motors, it’s quite obvious that consumer protection is not very high on the priority list. Indeed, if it were, reputable dealers would be quickly be put out of business by someone willing to cut corners. The best industry report card ratings give Ford Motor Company a mere 50% in customer satisfaction. Premium automaker BMW got a 66% rating, and Lexus, Toyota’s Luxury arm, topped the list at 72%. Tesla Motors, on the other hand, received a 99% ranking from Consumer Reports. No other automaker or vehicle has EVER received a 99% CR ranking.
So, who’s got your back, New Jersey automobile consumer? My guess, considering the recent decisions at the top, is that it isn’t NJ CAR (New Jersey Coalition of Automotive Retailers). You can read Tesla Motors CEO Elon Musk’s letter on the Tesla Motors Blog.
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