Elon Musk is a polarizing character, and for many dealership owners and dealership organizations, especially in the South, he is viewed as a foreigner, an upstart, and quite possibly a whipper-snapper, depending on the age of those being critical of the South-African entrepreneur and car maker.
For years, numerous car dealership organizations have ensured their livelihood through legislation aimed at keeping factory-owned dealerships at bay. No state—or man—has been more successful than the late Texas legislature Gene Fondren, whom I wrote about three days ago.
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Car dealers trying to crush Tesla
While Texas essentially nixed Tesla and Musk’s designs on Texas dealerships—no, they thrashed Musk’s bid to change the law—other states have been less than successful. These old-school lemon peddlers are now looking to crush Tesla Motors Inc (NASDAQ:TSLA) in numerous states through legislation. Never mind the fact that Tesla will produce less than 30,000 Model S sedans this year; he’s still viewed as a threat and they want to stop him and Tesla before they can ramp up production.
Tesla Motors Inc (NASDAQ:TSLA) has faced resistance from dealership trade associations across the country as it has expanded its stores and sales in recent years. Musk, responding to the state-by-state legal challenges, told Automotive News in April that he was prepared to go to federal court if he could not win at the state level.
“If we’re seeing nonstop battles at the state level, rather than fight 20 different state battles, I’d rather fight one federal battle,” Musk said, explaining that he could either lobby for federal legislation or bring a federal lawsuit in hopes of winning the right to operate the way he wants to, when he wants to.
Tesla facing less competition
Musk rightfully believes that his all-electric sedan will face less competition than it would in the “pick-up truck” states.
And if Musk and Tesla ever look to develop and market a pick-up truck, as Musk has alluded, look out. The gloves will really come off, and the shotguns will come out of the gun rack.
Returning to the fight in Texas. Tesla stores there “are legally prohibited from offering visitors a test drive, quoting them a price or even directing them to Tesla Motors Inc (NASDAQ:TSLA)’s website,” according to the report by Texans for Public Justice.
Tesla not interested in dealerships
Diarmuid O’Connell, Tesla Motors Inc (NASDAQ:TSLA)’s vice president of business development, told ABC News earlier this year that Tesla does not want to go through dealerships to sell its car, because only its staff can properly educate the public on what makes electric cars and Tesla cars unique.
“We’re not in the business of tearing down the dealer model,” said O’Connell. “We simply believe that to successfully introduce this technology to the market, it needs to be done in a focused fashion, by us.”
Makes sense, though expect Tesla Motors Inc (NASDAQ:TSLA) to see more legislation thrown its way soon.