Tesla Motors Inc Faces Unnecessary Protectionism: AutoNation CEO

Tesla Motors Inc (NASDAQ:TSLA) has faced resistance from dealers ever since it opted for direct selling, but AutoNation CEO Mike Jackson thinks that the efforts of auto dealers to ban all direct sales by the electric vehicle manufacturer by the Ssate is “unnecessary protectionism,” according to a report from Detroit News.

Tesla the victim of redundant protectionism

Jackson’s latest stunning comment segregated him from a range of auto dealer organizations and lobbyists which took up the cause five years ago to get restrictions imposed on Tesla Motors’ direct selling strategy. Jackson commented on the bill signed by Michigan Gov. Rick Snyder that’s aimed at banning Tesla’s direct sales model in the home state of Fiat, Chrysler, Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), according to Detroit News.

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Arguments given by the AutoNation CEO were not different from what journalists noted while covering the tussle between Tesla Motors and car dealer lobbyists. Every state follows laws that restrict auto companies from selling directly to customers to safeguard auto dealers from unfair competition. Dealers are cautious that these car makers can withdraw the hot selling models from their showrooms or undercut the benefits, which will shut the door for them ultimately.

According to Jackson, Tesla does not have franchised dealers to protect. This implies that all such direct sales restrictions that exist are directed towards Tesla.

Jackson not favoring Musk’s strategy

However, Jackson does not believe that the company’s direct sales model is the right one. He said, “If Elon Musk wants to make a mistake and go with an inefficient distribution system,” he told the audience, “that’s his right as an American.” He added that AutoNation was not afraid of Tesla, adding that the automaker will contact him someday when Musk will really want to sell their cars.

Jackson never shied away from keeping his point directly and has been an ardent supporter of higher taxes on gasoline, which he consider a better way than the corporate average fuel economy rules to get consumers to buy and drive more efficient vehicles. Jackson also underlined the benefits that Tesla received from an array of federal and state incentives program to encourage buyers to opt for electric cars.