Tesla CEO Elon Musk Willing to Take Auto Dealer Fight to Federal Level
April 16, 2013 12:13 PM
comment(s) - last by
He'll either lobby Congress for legislation or file a federal lawsuit
Tesla CEO Elon Musk is determined to win the fight against auto dealers and sell his company's vehicles directly to customers, but if he doesn't succeed at the state level, he's willing to make it a federal case.
"If we're seeing nonstop battles at the state level, rather than fight 20 different state battles, I'd rather fight one federal battle," said Musk.
According to Musk, he will likely take one of two approaches if it comes down to a federal matter. He will either lobby Congress to pass legislation for the direct sales of EVs made by startup companies like Tesla (and tie it to an energy or transportation bill) or file a federal lawsuit to fight the state restrictions as unconstitutional violations of interstate commerce.
However, The National Automobile Dealers Association (NADA) said it will continue to defend franchise and consumer laws in the states.
"NADA will vigorously defend the franchise system," said David Westcott, chairman of the National Automobile Dealers Association. "A better option for Mr. Musk is to take advantage of the dealer network that already exists."
Musk has been
pushing support fo
r a recent bill
in Texas, called
House Bill 3351. This would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships.
He has gone as far as offering to
build a second manufacturing plant
in Texas, and is even trying to appeal to Texas consumers by discussing a design for an electric pickup truck that would be stronger than any current gasoline truck.
In addition to Texas, Musk has had issues persuading other U.S. states to allow the auto startup to sell its cars directly. Some of its problem states include Colorado, Massachusetts, Minnesota, New York and Virginia.
Musk could have a huge fight ahead, though. NADA said that 48 states have some sort of restricition on factory-owned dealerships. Musk went on to say that about 20 of those have restrictions that would make his business model difficult while about six others have restrictions that would make it extremely difficult.
Musk has called the new Texas bill (and this overall business model of selling directly) a "life or death" situation for startups like Tesla.
“For us this is life or death,” said Musk. “If we can’t go direct we will not be able to sell cars.”
In the past, Musk has said that he's open to a dealership model at some point when sales increase, since dealerships do promote competition and keep prices down. But at a startup level, he said this type of model isn't the best route.
Tesla currently sells about 10,000 cars in North America, where about 1,500-2,000 are sold in Texas.
Tesla is shipping over 500 Model S EVs weekly, and recently reported that
the company is now profitable
thanks to the Model S exceeding sales targets. Tesla Model S sales reached 4,750, which topped the sales outlook of 4,500 posted in the February shareholder letter.
In addition, the automaker is partnering with Wells Fargo and U.S. Bank to offer customers more financing options for Tesla’s vehicles.
This article is over a month old, voting and posting comments is disabled
RE: Pretty pathetic
4/16/2013 8:38:42 PM
OTOH if you insert a middleman who buys and sells a wide variety of cars every day, he has the information and the experience to determine when a car is overpriced in comparison to the competition. He'll be able to detect artificially high prices long before individual buyers ever could, and due to his volume of purchases he'll be in a better position to call the manufacturer out on it and negotiate a lower price. So it's possible that the car dealers are actually helping the market.
I argue with a lot of that, but prices for cars are what your willing to pay. 100k Porsche Cayenne used are barely a 1/3 of that. Used Roadster can prob be had for a bit as there sold out in US. Middleman often tack on extra cost because it's rare even if it's new. Why? because they can. Dealerships that take advantage of this are prob pissing off customers which complain to Tesla.
"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson
Elon Musk Says Tesla May Build Second Plant in Texas
April 11, 2013, 11:01 PM
Tesla's Elon Musk Fights for Texas Electric Vehicle Sales Bill
April 11, 2013, 12:52 PM
Tesla Motors Now Profitable, Drops 40 kWh Model S Battery Option
April 1, 2013, 10:02 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Quick Note: GM Teases Next Generation Chevrolet Volt
November 20, 2014, 3:26 PM
Audi is Latest to Step Into the Hydrogen Game, Delivers A7 Sportback h-tron quattro
November 19, 2014, 1:41 PM
Most Popular Articles
FCC Bans Data Discrimination, Defies Comcast, Adopting Net Neutrality Regulation
February 26, 2015, 4:03 PM
Google Steps up Snub of Adobe Flash, Auto-Converting Flash Ads to HTML5
February 25, 2015, 6:16 PM
Windows 10 Adds USB 3.1 for Dual-Role Peripherals, External Display Support
February 27, 2015, 11:39 AM
Australian Engineers Successfully Developed 3D-Printed Jet Engines
March 2, 2015, 11:08 AM
Smartphone STD Scanner Dongle Can Detect HIV in Just 15 Minutes
February 26, 2015, 11:04 AM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information