Elon Musk: Tesla could go federal with franchise dealer fight
Musk tells Automotive News that he may go to Congress in an attempt to take on the country's auto-dealer groups in order for his company to own all of its distribution channels. Musk's main argument is that there is a conflict of interest when one dealer sells battery-electric vehicles and gas-powered ones and that the hyper-advanced technology of cars like the Tesla Model S need special explanations. This is why traditional franchise dealer models won't work with Tesla, at least while sales numbers are still relatively small. Once Tesla EVs account for one percent of all US new-car sales, Musk says, a mix of company-owned stores and franchises would suffice.
"It's really difficult for a new company with a new technology to be franchised," Musk told Automotive News. "It's not possible to effectively sell a new technology like electric vehicles, for a dealer to do that, without undermining the story behind gasoline cars."
So far, Tesla has taken on states such as Massachusetts, Minnesota, New York and, most recently, Texas. Tesla recently gained a legal victory when New York Supreme Court Justice Raymond J. Elliott III wrote that dealers couldn't cite the Franchised Dealer Act as a motive to sue competitors. New York dealers last fall sued Tesla in an effort to get the company to close its company-owned stores. This patchwork strategy isn't appealing to Musk in the least. He told AN, "If we're seeing nonstop battles at the state level, rather than fight 20 different state battles, I'd rather fight one federal battle."
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