Tesla CEO Elon Musk May Make Dealership Fight a Federal Case
September 17, 2013 12:14 PM
comment(s) - last by
Texas just shut Tesla down on the state level
CEO Elon Musk is determined to win the dealership fight by any means necessary -- even
going to the feds
A new report from
says Musk may take the dealership fight to the federal level since working at the state level hasn't been completely successful.
Here's the deal: Musk believes that auto dealerships don't do a very good job at selling specialty cars like Tesla's high-end electric vehicles (Roadster, Model S). Hence, he's looking to run his own Tesla stores around the U.S. where he believes his cars will get a fair shot at being sold.
However, auto dealerships are fighting back. If Tesla were to succeed at opening its own dealerships, other automakers could try to do the same. The National Automobile Dealers Association (NADA) said that dealerships are necessary to ensure competitive prices for customers, and that it will continue to defend franchise and consumer laws in the states.
While Tesla has been able to fight off auto dealership assaults in some states -- like
-- it has had a more difficult time in others, like Texas. The state has laws that protect the franchise dealership system where car manufacturers are not allowed to run and own dealerships -- and Texas isn't looking to budge on that issue.
Musk has worked quite a bit to eliminate the conventional dealership model for his cars in Texas, going as far as
a recent Texas bill
called House Bill 3351, which would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships. He also offered 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.
Tesla made a case before the state legislature this past session that Tesla should be one exception to the state laws, and be allowed to sell its cars to the public directly. The state legislature blew it off without even taking a vote, and that was that. According to NPR's
, the reason was because Tesla failed to lobby as much as the dealership associations. Tesla spent about $345,000 in lobbying while dealerships spent about $780,000.
Texas isn't alone in attempting to keep Tesla at bay. New York, Massachusetts and others have attempted to shut down Tesla's stores as well.
With that, Musk is looking into taking his fight to the federal level in order to bypass each state's restrictions. Musk may lobby Congress or file a federal claim saying that the state laws banning Tesla-owned dealerships are unconstitutional.
Musk said in April that he'd be willing to make the fight a federal battle.
"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.
Automotive News 
This article is over a month old, voting and posting comments is disabled
Tesla is here to stay
9/17/2013 12:34:27 PM
Fvck them. Tesla is here to stay.
It is sad that people will go out of state to buy and drive Teslas.
RE: Tesla is here to stay
9/17/2013 1:01:59 PM
Has nothing to do with Tesla or not. It has to do with the ridiculous manipulation of the consumer auto market by having state governments require dealership networks.
Good on Tesla for pressing the issue though. The vacated-tube supertrain thing is nothing but a pipe dream (heh), but this is a good social issue that he's taking on this time.
RE: Tesla is here to stay
9/17/2013 1:18:12 PM
Exactly. These types of laws violate the free market and cripple smaller startup's. The thing is Tesla isn't really a startup anymore...they *could* run a dealership network, but I stand for their reasons not too. Buying a car through a dealer is so stressful I don't even bother. My last 3 vehicles have been from a private party because negotiations are easy, there is no BS fees or paperwork, and it takes 5 minutes, not 5 hours before I'm driving away.
"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher
Tesla Motors Successfully Fights Off Auto Dealership Assault in North Carolina
June 27, 2013, 2:36 PM
Tesla CEO Elon Musk Willing to Take Auto Dealer Fight to Federal Level
April 16, 2013, 12:13 PM
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
Volvo to Test Self-Driving Cars on Public Roads in 2017
December 3, 2013, 8:17 PM
Survey: EV Buyers Scoff at Price Tags Over $25,000
December 2, 2013, 12:26 PM
GM Compares Cadillac ELR's Pricing to BMW 6-Series Grand Coupe's
November 29, 2013, 3:10 PM
Quick Note: Nissan's Autonomous Leaf EV Hits Japanese Streets
November 27, 2013, 10:36 AM
Ford is Ready for Aggressive Rollout of Fuel Saving Start-Stop Technology
November 25, 2013, 9:40 AM
GM's All-new Colorado Midsize Truck to Receive Diesel Power
November 20, 2013, 9:23 AM
Most Popular Articles
NSA Snares Americans' Porn Viewing Histories in Effort to Target Muslims
December 1, 2013, 9:00 PM
Coalition of 20+ Tech Firms Backs MRAM as Potential DRAM, NAND Replacement
November 29, 2013, 11:59 PM
Fed Up With Cheating OEMs, Microsoft Trolls Chromebooks in New Ad
November 27, 2013, 4:09 PM
Xbox? PCs? Mobile? Microsoft Wants One Windows to Rule Them All
November 25, 2013, 8:21 PM
Seattle Restaurant Bans Google Glass, Tells Wearers to "Just shut up and get out"
November 27, 2013, 10:27 AM
Latest Blog Posts
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
AT&T Explores $100B+ USD Deal to Acquire Vodafone's European Operations
Nov 4, 2013, 7:34 AM
U.S. Army Developing Cyber, Electronic War Arsenal
Oct 31, 2013, 4:49 PM
More Blog Posts
Copyright 2013 DailyTech LLC. -
Terms, Conditions & Privacy Information