Our friends at Engadget, tech-obsessed sister site of Autoblog, have taken an in-depth look at the reason why it's so difficult for Tesla to sell its cars directly to consumers, the same way that Apple, for instance, can sell you an iPad at an Apple Store. As you're probably aware, the whole sordid affair can be traced back to dealer franchise laws, which vary dramatically state to state, all with the stated goal of protecting your local neighborhood car dealers from unfair competition.

What sort of unfair competition, you ask? And from whom? Well, that's the heart of the matter, and it seemingly makes very little sense to the average consumer. Engadget puts it pretty bluntly:

It's not really about Tesla, or electric cars. It's about money. It's an argument against competition that may or may not even manifest in reality.


It's also a complicated issue, and one that doesn't have a simple solution. To wit, just as it seems unfair to keep Tesla from selling directly to consumers, it's also unfair, not to mention illegal, to shrug off and ignore rules and regulations that were concocted, debated and put into law as a protection to dealership owners, many of whom have been operating under said rules themselves for decades. Adding another wrinkle is the fact that nothing is preventing Tesla from using the established franchise-dealer model that every other automaker in the US also uses. Nothing, that is, other than Tesla itself.

Want to know more? We can't promise that you'll really understand all the behind-the-scenes minutia and political wrangling that's gotten us to where we are now, but you will, at the very least, have an understanding of the issues at play after reading the article here. And when you're done, feel free to come on back and let us know what you think in the Comments.


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  • 22 Comments
      offib
      • 1 Year Ago
      "Nothing is preventing Tesla from using the established franchise-dealer model that every other automaker in the US also uses. Nothing, that is, other than Tesla itself." Didn't Consumer Reports already found out that some, not a negligible number of dealerships commonly discouraged customers from electric cars?
      Tony Belding
      • 1 Year Ago
      quote: "It's also a complicated issue, and one that doesn't have a simple solution." Sure it has a simple solution. Do away with the franchise laws. Few other countries have them (I'm not actually aware of any that do), and yet somehow the automotive industry continues to function globally. Simple solution number two: Exempt companies (like Tesla) that don't have any dealer franchises in the state. For any established car maker to get out from under the law, they would have to buy out all of their dealers at once, which is impractical.
        JeremyABG
        • 1 Year Ago
        @Tony Belding
        It really isn't as simple as you seem to think. There are laws in place, whether you agree with them or not. Those laws are there to protect small business owners – namely, car dealers – and can't simply be wiped away like an eraser on a chalk board. I think we all agree that Tesla should be able to sell its cars to the general public. Suggesting that the solution to the problem is easy is misguided.
          bluepongo1
          • 1 Year Ago
          @JeremyABG
          Pre-internet zombie business model laws do not apply to a post-internet business model that never had dealerships... it really IS simple. Netflix doesn't have to open up Blockbuster Video stores because the internet killed them, all the spin and payoffs aren't going change the NADA zombies' fate. :-P
        purrpullberra
        • 1 Year Ago
        @Tony Belding
        I (and others) have been saying this for over 2 years here. It is unreasonable how unreasonable these corrupt politicians are. We all know the dealerships are rotten from the top down. The corruption must be gone around. Statewide initiatives will do the job. The public is ALL FOR Tesla on this issue.
      Naturenut99
      • 1 Year Ago
      The law was to protect dealerships from the manufacturer from being able to undercut them on price. Since Tesla has no dealerships to undercut, it's not illegal. Nor can they ever violate the spirit of the law without having had any dealerships.
      jeff
      • 1 Year Ago
      The answer is simple: GREED!!!!!!
      elctrNmbliT
      • 1 Year Ago
      The solution is actually very simple. Let's make an analogy. Imagine if back in the middle of the 19th century before electricity was widely available, wash basins and scrub boards for some reason were required by law to be sold through franchises based on a previous agreement between the big three wash basin producers and the nationwide local networks of resellers that already existed. Then during the first half of the 20th century when most people had electricity in their homes this company called Whirlpool who didn't make wash basins and scrub boards but made a new device called an electric powered washing machine wanted to get them to customers who really wanted them. They wanted to sell it directly to customers through what was a new growing craze, the catalog. People could mail in their order for a washing machine or even order by phone. Then someone would simply deliver it by mail. Also if the machine broke down a service employee would simple drive out with a truck, pick it up and take it to one of their service centers for repair and deliver it back to the customer when fixed. It wasn't long before the wash basin and scrub board franchise dealers took notice of this new company and contacted their state representatives to make them enforce the wash basin/scrub board franchise law of 1850 and stop Whirlpool from selling direct though catalogs. They demanded that Whirlpool sell their new washing machines through a franchise system of independent local owners that would buy the washing machines from Whirlpool and then mark up the cost so they would have enough money to pay for the big buildings they would have to build to house the merchandise and for the service center to fix the machines. Does that sound fair or make any sense? No of course not. ICE cars and EV cars are similar in the same way a wash basin and a washing machine are. Both a wash basin and electric washing machine clean your clothes but the similarity ends there. Both types of cars take people from point A to point B and have four tires but the similarity ends there.
      bluepongo1
      • 1 Year Ago
      To answer the headline: Status quo & the pay-for-play Govermedia that props it up. From the article: "Adding another wrinkle ..... etc. " To adress that sentence: nothing is preventing Netflix from opening Blockbuster Video stores, nothing, that is, other than Netflix itself. ( and that it's a pre-internet dead business model.) Again: nothing is preventing Ebay from opening flea markets/pawn shops nothing, that is, other than Ebay itself. ( and that it's a pre-internet dead business model. ) Jeremy K. why doesn't ABG publish a glossy paper edition? nothing is preventing ABG , nothing, that is' other than ABG itself. ( and that it doesn't have quality writers )
        Levine Levine
        • 1 Year Ago
        @bluepongo1
        bluepongo1: The opposition argument is fundamentally flawed. They claim Tesla can have franchise dealerships, too, so why is Tesla challenging the auto franchise laws? Why would Columbus argue that the world is round when he can just as easily join the flat-earth scientists? Why would the tree-huggers fight for environmental laws when the "Greenies" can also join the polluters? Why would anyone fight evil when he can join the devil and have twice the vice?
        purrpullberra
        • 1 Year Ago
        @bluepongo1
        Extremely good point and one these ABG'rs will never have the guts to address. The 'writers' and 'editors' doing 'journalism' still come up as absolute failures in logic or professionalism. They've never addressed glaring mistakes like the ones you and I point out today. No accountability to truth or readers.
      LEONARD
      • 1 Year Ago
      Why keep bringing this up??? It's way old news !!!
        Jon
        • 1 Year Ago
        @LEONARD
        Click bait! Don't fall for it! What, you already did? Darn it so did I!
      purrpullberra
      • 1 Year Ago
      It is an absolute LIE to say these laws were "debated". Cite some evidence of people being allowed to voice their opinions to legislatures or cite the days these laws were up for debate. ABG never covered them. In fact ALL the latest attempts to further anti-Tesla legislation along were done without notice, behind closed doors and/or in the middle of the night. How is this "debate"? This is in fact corruption. It's an especially terrible article and unprofessional 'journalism' to not mention AT ALL that the vast majority of people think Tesla has the right to sell directly to people without dealerships. So you've lied about "debate". You've completely neglected to mention that the majority of people who know about the issue believe Tesla has every right to sell direct VOICING OPINION AGAINST the votes of their corrupt elected officials. These points are at the top of the list if you are going to write this article at all. Such a terribly written, lazy, half article that lies and misses some of the most important facts surrounding the story. Typical. Terrible.
      Levine Levine
      • 1 Year Ago
      Jeremy got it right: it's about money. Big money. It is also about freedom; freedom to sell your goods to consumer directly, the age old tradition practiced for a thousand years. Until special interest groups and corrupt politicians curtailed that freedom. And the consumer suffered more than one way. Two wrongs do not make a right. And a scam practiced by a thousand dealerships do not make a virtue. Tesla can join the scam, of course. Just as joining a thousand plantation owners is easier than standing up for human decency and freedom. Liberty is destroyed not by a single stroke, but chipped away by a thousand little ones.
        Joeviocoe
        • 1 Year Ago
        @Levine Levine
        @ Levine Levine Spot on.
        purrpullberra
        • 1 Year Ago
        @Levine Levine
        He got the simplest part right maybe but after that he spews incorrect and incomplete BS. It makes the one right thing a mistake in an awful piece. I don't think he deserves credit for getting only the one obvious point.
          bluepongo1
          • 1 Year Ago
          @purrpullberra
          LOL!! actually engadget.com got that right, the writer ( Jeremy K. ) is clearly on the NADA 's side.
      • 1 Year Ago
      Most dealerships are owned by uneducated greedy business ******** and do not want a new selling model like Tesla changing their GOP outdated ideas!!! I want to buy a car from my living room chair and not deal with salesmen who know less than I!!!
      goodoldgorr
      • 1 Year Ago
      I found another article on tesla and it is positive. http://seekingalpha.com/article/2317515-tesla-secret-bullish-guidance-in-plain-sight?ifp=0
        bluepongo1
        • 1 Year Ago
        @goodoldgorr
        I saw this on cracked.com so what ? >===> http://www.cracked.com/quick-fixes/why-oil-companies-caused-7-earthquakes-this-weekend/ BTW thanks to @ purrpullberra & @ Levine Levine I enjoy your comments too. :-)
          bluepongo1
          • 1 Year Ago
          @bluepongo1
          Actually thanks to everyone fighting the B.S. that this NADA apologist is trying to pass off as an article about an article in engadget.com. If my response to @ goodolgorr seems tearse, it's because: he, like other hydrogen folks is trying to balance his already established bias against Tesla Motors ( whose vehicles he will never own.) . Gorr is "on-topic positive " posting so folks won't completely ignore his B.S. opinion that people can't understand let alone relate to. I believe it was @ Joeviocoe that said B.S. is soft, so it has to be thinly wrapped in truth to pass on.
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