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Tesla Motors Sued By Car Dealers

Anonymous Coward writes | about a year and a half ago

The Courts 1

An anonymous reader writes "Car dealers in New York and Massachusetts have filed a lawsuit that seeks to block Tesla from selling its pricey electric vehicles in those states. The dealers say they are defending state franchise laws, which require manufacturers to sell cars through dealers they do not own. Robert O'Koniewski of the Massachusetts State Automobile Dealers Association says, 'Those dealers are investing millions of dollars in their franchises to make sure they comply with their franchise agreements with the manufacturers. Tesla is choosing to ignore the law and then is choosing to play outside that system.'"
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1 comment

Is this really the letter of the law ? (1)

macpacheco (1764378) | about a year and a half ago | (#41945877)

Car manufacturers are forbidden from selling both through dealerships and directly.
Both sides will get their day in court.

However Mr. Musk, CEO of Tesla argues that the law doesn't forbid a car company from selling cars exclusively directly to their customers.
Car dealerships usually sell cars in stock. Tesla is currently clearing a 13k Model S backlog, so there are no cars to be sold for a dealership.
Since Tesla has no dealerships, only product showrooms, where the "sales person" gets no commission and doesn't actually sell a car, instead his sole purpose is to show the cars virtues to try to get the customer in line for delivery of the car perhaps as much as one year latter.
Also, car dealerships have a huge conflict of interest in selling both EV and conventional cars, because telling a customer all advantages of an advanced EV like the Tesla Model S would quickly show that regular cars are dinossaurs that should have died already.

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