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
RE: I originally had an open mind about the value of dealerships
9/17/2013 5:03:02 PM
Dealerships today are glorified brick-and-mortar showrooms with salespeople working on commission - and with that, some of the more unsavory and unscrupulous practices they employ to push sales.
The first time I shopped for my car, the sales guy took me on a test drive where I was disallowed to make any right-turns. Instead of a "you break it, you buy it" approach, they're not letting me try the car as is while not breaking any local driving safety rules.
"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference
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
Michigan Governor Signs “Anti Tesla” Bill That Bans Direct Sales, GM Applauds Decision
October 22, 2014, 8:56 AM
Report: 2015 Ford Focus Electric MSRP Slashed by $6,000, Will Retail for $29,995
October 18, 2014, 6:23 PM
Chevrolet Sonic EV to Have 200-mile Range, Debut in 2017
October 10, 2014, 12:01 PM
Auto Start-Stop Systems Will be Installed on Nearly 60% of New Vehicles by 2020
October 8, 2014, 4:19 PM
Volvo XC90 to Receive Triple-turbocharged, 450hp 2.0-liter Four-cylinder Engine
October 7, 2014, 2:29 PM
Nissan Still Trying to Make a Profit on Leaf EV
October 6, 2014, 5:46 PM
Most Popular Articles
Cool Science Video of the Day: Carnivorous Leech Eats Giant Jungle Worm
October 16, 2014, 6:44 PM
Chinese Government Declares Digital War Against America's Top Tech Firms
October 20, 2014, 12:07 PM
PS4 "Masamune" Update 2.0 Will Bring New Music and Customization Features
October 17, 2014, 1:05 PM
HBO, CBS Lead Charge to Ditch Cable
October 16, 2014, 4:40 PM
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Latest Blog Posts
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
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information