Tesla’s direct-selling model is forcing the company to fight battles on multiple fronts with various states and it’s not always getting good results. If all else fails, they’re prepared to take the fight all the way to Washington.
The company’s selling model relies on being able to sell directly to the consumer without the dealer as middleman, a model that auto dealers are understandably not happy to see. If Tesla can do it on their own, then that opens the door for other auto manufacturers to follow suit.
The National Automobile Dealers Association (NADA) is doing its best to stop Tesla and has had some success, but Tesla has managed a few successes of its own. The company stopped legislation in Minnesota, North Carolina and New York. It also saw lawsuits brought by dealers in Massachusetts and New York dismissed.
The Massachusetts and New York dealers are appealing their cases so that’s not really over yet. Tesla also lost a licensing dispute in Virginia and failed to obtain an exemption to existing laws in Texas that forbid manufacturer owned dealerships. All told, about half the states have laws that will make it a challenge for Tesla to operate.
That’s a lot of individual lawsuits and legal battles, so the idea of taking it to the federal level for one large assault is a real possibility. Tesla could choose to file a lawsuit under the grounds that the state laws are a violation of interstate commerce. They could also choose to lobby congress to allow direct sales of electric cars.
It would definitely be an interesting battle. NADA has deep pockets and spent $3.7 million in campaign contributions and $3 million in lobbying in 2012 alone. Add to that the influence individual dealerships wield in their own states over their legislators.
Tesla is ready for the fight, with CEO Elon Musk as their pocket ace. He is a rock star in his own right, and once he winds up the publicity machine, Tesla fans are right there ready to give it an extra boost.
None of their options are easy, but no matter which they choose, Tesla is ready to fight.
Nicole Wakelin fell in love with cars as a teenager when she got to go for a ride in a Ferrari. It was red and it was fast and that was all that mattered. Game over. She considers things a bit more carefully now, but still has a weakness for fast, beautiful cars. Nicole also writes for NerdApproved and GeekMom.