Published on September 19th, 2013 | by Christopher DeMorro
Tesla Could Take Dealership Fight To D.C.
Auto dealerships have been longstanding powerhouses in state capitals across the nation, but the tides may be turning thanks to Tesla. Yet the progress to establish company-owned Tesla stores may not be going fast for Elon Musk, who is considering a national-level debate about how “free” the free-market for cars really is.
So far Elon Musk has met with more victories than losses in his quest to sell electric cars without involving dealership franchises, but those losses have been big. Tesla failed to open up Texas to its new sales model due to an entrenched and well-financed dealership lobby, meaning Tesla “stores” cannot offer test drives or even the website to potential customers.
Rather than go state-by-state, Musk and Tesla’s team of lawyers are mulling going straight to Washington D.C. for a national level fix, possibly striking down laws that protect the dealership racket. It would be a hard-fought battle, as dealership associations have gone to great lengths to prevent Tesla from upending the status quo, though not every car dealership owner is on board to battle Tesla.
It’s also possible that Tesla’s move could backfire, further entrenching and empowering dealership associations against the electric automaker. While Musk has not ruled out the possibility of one day allowing franchise dealerships to sell Tesla electric cars, right now the billionaire CEO wants strict control over how his cars are discussed and sold. Over in Europe Tesla is having a much easier go at it, with 20 stores soon to open in Germany alone.
For the dealership lobby, the stakes are just as high, as their very business model is threatened. If Tesla is allowed to sell its vehicles directly to the public, major automakers may try to follow suit, and they have far more pull in Washington than Musk or the dealer lobbyists. Perhaps Tesla could even find an unlikely ally among the bigger automakers, which would also benefit from a direct-sales model.
It won’t be a quick or easy fight, but it could change the way we buy cars forever.
Source: Automotive News