Video: Bloomberg Discusses the Impact of Tesla Getting 100,000 Signatures on Direct Sales Petition


We all know by now that Tesla surpassed the 100,000 signatures required for its direct sales petition.0

This means that it’s time to move the petition through the political process, but what’s the next step?  And what we be the likely result?

We don’t claim to be political correspondents, nor do we waste countless hours determining how the political system will respond to such a petition.

However, there are people out there whose job it is to understand the intricacies of the US political system.  And it’s those people who are most able to explain where it goes from here.

So, let us now turn it over to one of those people who can help make sense out of this complex politcal situation.

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6 Comments on "Video: Bloomberg Discusses the Impact of Tesla Getting 100,000 Signatures on Direct Sales Petition"

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Cory Johnson has a highlight real of bashing Tesla. This is just adding to it. His comments are just absurd.

Tesla can sell cars online to Texas. They just cannot sell from their two “galleries”, which is inconvenient and confusing to consumers because they can buy any other product at a factory store (i.e. Apple, GAP, Michael Kors, Ben and Jerry’s, Merritt’s Boats, Gulfstream Jets, etc.).

Tesla is not trying to avoid building out a network of retail locations. They just do not want to build locations that are legally prevented from providing test drives and completing sales for customers, if the customer prefers to do it in person.

Individual dealers would not be giving up their right to sell vehicles even if the laws were changed. They would just no longer be unfairly protected by state franchise laws. Remember that nowhere else in the entire world do laws like this exist. Just in the home of the (sort of) free and exemplary capitalism, the U S of A.

/rant complete

Why is it that every time I see one of these interviews on a “money TV show”, whenever they need a “bad-guy” example of a car company or car, they always choose either GM, Ford, or Chysler? I bet if Tesla was not domestic, it probably would have caught less backlash from these shows as well.

You want to see some smoke-out-of-their-ears – wait and see what a Mercedes or BMW dealership will do if they hear that the factory could sell direct.

To me the law to do this is simple – it is permissible to have a company sell its own cars as long as they’ve never had a franchisee in that state. Ford, GM, etc wouldn’t be allowed to cancel existing franchises, but Tesla (and anyone else who can build a successful start-up car company) can sell cars direct to consumers the same way Apple sells iPads directly to the consumer.

The wrinkle here is if Tesla gets acquired by a big auto brand. How would that work? Would they have to close the boutiques and shift to a franchise model? Can they keep that one brand separate? Who knows.

Kind of strange logic at work here dealerships do not have a right to sell cars per say. That right was bestowed upon them by laws they helped to create. Thus it can be taken away at anytime without renumeration. The political angle is rather out there too what he is alluding to is the lawmakers are beholden to the dealers and not the voters that elect them. I can’t imagine for a second a majority of voters supporting the dealers side of this debate. Auto dealers are the kind of businesses everyone loves to hate, we all know or at least perceive that they add zero value to the transaction. There is a reason these laws exist in the first place because without them the dealership business model is dead.

There are other industries or individual companies that choose to use a dealership model for various reasons (cost of holding inventory, knowledge/relationships in the local market, etc.). Those companies are choosing the model however, not required by law. Remove the laws and find out if the dealers add or remove value to the customer.

The only other industry with similar laws is alcohol distribution, which is just a hangover from prohibition.