Tesla To Unleash Local Lawyers…And The CEO Across The Country For Dealership Battle

JUN 19 2013 BY JAY COLE 11

Tesla Has Plans To Have 50 Boutique Stores In Play By Year's End...Provided They Can Keep State Law At Bay

Tesla Has Plans To Have 50 Boutique Stores In Play By Year’s End…Provided They Can Keep State Law At Bay

With Tesla facing some strong opposition to their direct-sales model, the company is bulking up its business development team according to a report filed by Reuters.

CEO Elon Musk Vows To Make A Larger Personal Effort Talking Up Tesla's Reasoning Behind Going It Alone When It Comes To Sales

CEO Elon Musk Vows To Make A Larger Personal Effort Talking Up Tesla’s Reasoning Behind Going It Alone When It Comes To Sales

Tesla’s CEO Elon Musk feels that more interaction with local politicians in the key battle states is needed, and that the fight the company is facing might not be the fairest:

“At the state level, very often, the car dealers are the biggest funders of local state politics. That’s been a problem for us obviously.”

To that end, more personnel will added be to Tesla’s business development team that is currently waging both a legal and a PR battle in states such as  New York, Massachusetts, Colorado, Virginia, Texas and most notably in North Carolina – where the automaker is even facing being banned from selling and communicating with potential customers via the Internet.

How large a battle will this team face?   According to Mr. Musk, pretty big:

“We need to apply more resources to this because we’re finding that it’s a multi-front war.  They outnumber us at least 10 to 1, maybe 20 or 30 to 1.”

Tesla Owners Line Up Their Model S Sedans At The Texas Capitol In Support Of Hearing For HB 3351 Earlier This Year

Tesla Owners Line Up Their Model S Sedans At The Texas Capitol In Support Of Hearing For HB 3351 Earlier This Year

To aid in the fight, Elon says that he will also get more personally involved in talking up the company’s direct sales-boutique store strategy.  Without it, the Tesla boss says the company will not succeed.

“It’s a tough battle we face.  We don’t necessarily have all the answers. I certainly believe that if we were to go through the regular franchise system that we would not succeed.”   – Elon Musk at the Reuter’s Global Technology Summit on Tuesday

Tesla feels that direct sales help to even the playing field on electric cars versus traditional cars that have much lower production costs, as well as salespeople and dealerships that really do not want to sell them at all.  According to Musk, “It’s (electric cars) harder to sell, and then they (dealerships) make less money on service, so for sure we would be the last thing they would sell.”

Tesla currently operates 34 boutique stores worldwide, but will expand that number to about 50 by year’s end.

According to the Center for Automotive Research, and reported by Reuters, auto dealerships across the country actually paid more corporate income taxes and license fees to their home states than the automakers and part suppliers themselves; and at $458 million to $295 million…it wasn’t even close.

Tesla is in for a tough battle indeed.


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11 Comments on "Tesla To Unleash Local Lawyers…And The CEO Across The Country For Dealership Battle"

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I was thinking about this topic this morning: Why can’t Tesla just buy TV and print advertisements in those states where they’re not allowed to “sell” the car? Simply display the car like any other commercial and list the website at the end.

@ Aaron…Tesla doesn’t really have to money to advertise in all those states in the traditional way. It’s way expensive. So, Tesla advertises like this: http://insideevs.com/tesla-motors-needs-no-ad-agency-or-advertising-to-sell-model-s-electric-sedan/

Create “Tesla Coffee Shops”, were they only sell coffee beverages on site, but also:

1. Provide locked Internet access in the lounge area, to the Tesla Website to place a Vehicle Order.
2. The ‘Baristas’ can answer any question about Tesla Products, and make killer lattes.
3. The “Theme” and artwork in the coffeeshop is “Tesla” oriented, with static and interactive artwork that demos current Tesla Products. And maybe coffee, too.
4. You can schedule to drive the “Coffee Delivery Vehicle” of your choice, as long as it’s a Current Model Tesla. Not everyone gets the delivery position, but you can take the car home, if you liked it.

Imagine if Steve Jobs had to go through independent dealers by law. Yeah.

well we all know how well GM sells the volt using the franchise system.

One Volt owner has this story:

where he went into a dealership and asked how well the Volt was selling and was quickly steered to a Cruze…..but now get this: The salesman actually had the gall to tell him he shouldn’t buy the car because the batteries all wear out in 3-4 years.

I had a similarly poor experience trying to purchase one for my wife. I had her convinced after driving a Volt to replace her Murano with one. After one trip to a Chevy dealership, she left saying she wanted another CUV. I will try again when there is a VoltUV or a Tesla Gen III CUV.

The uneducated automotive salesforce could be the biggest hindrance to EV adoption.

Yep… some Nissan dealerships on the west coast are able to sell the Leaf really well. But if you go to a Nissan or Chevrolet dealership and ask about a Leaf or a Volt (which they probably won’t even have on the lot where you can see it) they won’t know anything about the car. In fact, anyone who’s spent 10 minutes on the manufacturers website will know more about the car than the salesmen. They won’t be interested in selling the car often because only a single salesman is qualified to sell it, so by default when you walk up to a salesman and say “Leaf” he knows he has lost the sale because he’s not allowed to sell it… UNLESS he can convince you that the Versa is the same car and much cheaper. Having said that. I believe Tesla would be a somewhat different story. If they actually sold those at a dealership i suspect most of the customers walking in to buy one would already be educated about the car and requesting it specifically. Our Cadillac dealer here in Ft.Worth was selling Fiskers pretty well, from what I understand.

Welcome to the free market! I want to hurl when I hear that standard talking point that the supposed free market is always the solution to a given problem. A business is just an economic organism moving towards profit and away from loss. They will always try to subvert the system to their advantage always have always will. It is up to government to make and enforce the rules, problem is now we have the best government money can buy. I feel for Tesla since they are upsetting the status quo and those that make a nice living with the status quo will fight them tooth and nail every step of the way. Don’t be fooled Tesla is not really the target it is the major auto makers being able to sell direct that scares the current beneficiaries of the dealer system. They know most everyone that has to deal with them hates it and would gladly buy their car from Ford via the internet, that is the real fear not a little electric car company from CA.

Wow franchise laws are the opposite of the famous Spock death quote.
“The needs of the many outweigh the needs of the few.”

In this case the “many” is the public and the “few” are the dealers.
Per current franchise laws: “The needs of the few outweigh the needs of the many.”

Our founding fathers are turning in their graves with disgust.


Maybe it would be cheaper to for Tesla to buy politicians instead of hiring more people. Maybe a free Tesla to anyone that votes in his favor.

Go Tesla – Stick it up em!
Pity you can’t take the whole lot of these loosers to the federal court and get a ruling once and and for all states.

I wonder – a lot of jurors would definelty support Tesla on this stand.