Tesla Motors is a one of a kind company, which puts it in an interesting place when it comes to actually selling their vehicles.
All automakers in the US are required, by law, to sell via franchise dealerships, that is, except for Tesla Motors, if you read the letter of the law. Even if you take the spirit of the law, which is essentially in place to protect automobile dealerships from competition with their own providers, Tesla Motors still isn’t bound by law.
The reason for the law is simple. If automobile manufacturers came in and started selling direct to the public, they could offer better pricing than the franchises could. The automobile dealer associations [ADA] represent hundreds of dealerships in their respective states, thousands of jobs and millions of dollars in annual revenue, and they do not like that Tesla Motors sells direct to the customer, in spite of the fact that Tesla Motors has no franchises who would suffer from such direct sales.
So, what’s the problem and why are the ADAs up at arms? Are they afraid of competition and capitalism? Funny thing about that, when the US stepped in to save banks and big companies from their own stupidity. Should they have been left to fail? Instead, now that there is a startup company, a successful one at that, offering a little competition, now the ADAs need US protection again. This time, the ADAs want the US to ban automakers from selling direct to the public, but we know they’re targeting Tesla Motors, the only automaker who doesn’t have a franchise.
Who do the legislators represent, big money or the consumer? Consumers need to make their voice heard if legislators are going to listen. Otherwise they’ll vote for their own pockets. On the other hand, if the ADAs cause too much of a fuss, the whole thing might backfire and they’ll lose all their protection. Who’s it good for, the ADAs or the consumer? The petition states: “State legislators are trying to unfairly protect automobile dealers in their states from competition.” Do you agree? Sign the petition!