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Uncategorized Tuesday, October 9th 2012 at 10:45 am

Traditional Auto Dealers Complain That Tesla Stores Are Illegal, Clearly Have Our Best Interests in Mind

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Tesla Motors is making quite a splash in the automobile industry. The announcement of their ambitious solar-powered Supercharger network for their Model S electric cars was a pretty big deal, and that’s only one of their initiatives. It looks like the way Tesla is getting the word out there has upset some traditional auto dealer associations. See, it’s basically illegal for an automaker to directly sell their cars to customers. That’s what Tesla’s opponents are saying they’re doing with their high-end mall stores.

Unlike typical dealerships, Tesla operates stores out of shopping malls that are designed to educate potential customers about the Model S. If they just so happen to then want to purchase one, store associates will direct them to a nearby computer terminal where they can purchase one. Officially, they’re not trying to sell anything. Instead, they are merely providing the ability to use a computer to shoppers in case they decide to take the plunge themselves.

The whole concept certainly centers on the splitting of legal hairs, but that’s often the difference between legal and illegal actions. Despite this fact, Automotive News reports that at least four states are suspicious of this model and have expressed concerns about it. Tesla is attempting to comply with all laws that affect their individual stores. Depending on where they’re situated, different state or local laws might be in effect.

An entrenched industry that has a vested interest in the status quo obviously wouldn’t lobby to have Tesla indicted for perceived infractions despite their stores not actually being illegal. That would just be petty. Automobile dealerships obviously only have our best interests in mind, folks.

(Automotive News via Wired, image via Nicolas Fleury)

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  • Jack Bond

    I question the decision to make selling cars directly to consumers illegal.

  • Ben Lamb

    Yeah, can someone explain the logic behind that to me? I’m sure it must make sense to someone, but I’m struggling to work it out.

  • Rollin Bishop

    The idea, as I understand it, was to block manufacturers from squeezing out third-party competition. If they both make and directly sell the things, regular dealerships probably couldn’t compete.

    That’s the reasoning, anyway.

  • Terinati

    The only legit reasoning I can come up with is that it had/has something to do with antitrust legislation, specifically preventing auto manufacturers (traditionally a monopolistic or oligopolistic industry due to the enormous capital required to produce automobiles) from domineering markets through vertical integration (owning everything in the chain from raw material to sales and services), which causes stagnation of technological growth. But since the laws were written the market has changed, and both expertise and venture capital are more freely available, making competition from innovative companies like Tesla feasible… now the law is doing the opposite of its intent. Like patent law. Just a guess, though. I don’t really know anything about it.

  • Anonymous

    Motion picture studios were once banned from owning theaters. The broadcast networks were only allowed to own a very limited number of over-the-air television stations. Such restrictions were put in place decades ago. Today, there’s a more free-wheeling-and-dealing attitude.

  • Jack Bond

    Dealerships are kind of pointless. Selling something because you’re not allowed to sell it yourself? If we could cut out dealerships, we could cut out the middleman and it wouldn’t matter if they can compete or not, because they’ll be gone.