Tesla Motors Inc (TSLA) Fights Back, Alleges Dealers Hindering Sales

Tesla Motors Inc (NASDAQ:TSLA) said that car dealer associations all over the country are working foul to hinder Tesla’s progress as the electronic vehicle manufacturer is clinching the shares of other automobile demi gods. Tesla believes that complaints filed by the dealers associations needs to be viewed in a broader, national context, says a report from MercuryNews.

Tesla Motors Inc (TSLA) Fights Back, Alleges Dealers Hindering Sales

Dealers accusing Tesla of manipulating financing options

Earlier this week, a trade group representing California’s new-car dealers suggested Department of Motor Vehicles probe into the method that Tesla is employing to market the electric Model S sedan, alleging that the company is manipulating the benefits of its financing options on its website.

Brian Maas, president of the California New Car Dealers Association, said that Tesla’s promise of monthly finance options for the Model S is both misleading and illegal.

Charles Cyrill, a spokesman for the National Automobile Dealers Association, declined the charges made by Tesla and said that this is a state issue that should be discussed by the authorities. The California New Car Dealers Association, which covers 1,100 new car and truck dealers, wrote in a nine-page letter on Monday asking the DMV to probe Tesla’s advertising practices.

However, the Palo Alto-based Company is in no mood to succumb to the arguments and allegations, and has fought back only to accuse the dealers of playing foul.

In the August newsletter, the State Dealers Association gave sales figures from June 2013, stating that, in California, Tesla sold more vehicles than veteran players like Cadillac, Jaguar and Porsche. DMV received the letter three weeks later.

Why are dealers objecting?

The bone of contention is that other prominent automakers are selling their cars through franchised dealerships, while Elon Musk’s Tesla sells the Model S directly through its stores. Dealers are not happy with the innovative decisions of Elon Musk and have even stopped Tesla from selling directly through stores in Texas and North Carolina.

Diarmuid O’Connell, Tesla’s vice president of business and corporate development, said on Wednesday, “There are state dealer associations in all 50 states, and a national dealer’s association. They would have you believe there is no coordinated activity.”

On Tesla’s website, they say they provide a self-service calculator where consumers can input the information about the importance of their time and the distance they commute, which is an unconventional way of advertising.

Jan Mendoza, a representative for the California DMV, said that the body has gotten complaints from the public and other associations. The DMV may investigate the issues under legal authority if warranted.