Why Does Tesla Enrage So Many Car Dealers?

Elon Musk’s Tesla company has been a prime example of innovation from the start. However its sales model continually comes under fire.

Legislators in a handful of states keep attempting to regulate Tesla sales. Currently, the manufacturing company sells its electric cars directly to consumers.

But auto dealers handling inventory for companies like GM and Ford think that’s “unfair.”

“I have fought as a gladiator… this [franchise] system is under attack by the likes of Tesla” – Virginia auto dealers.

Crying Foul

In North Carolina, a few years ago, state Rep. Tom Apodaca [R] as saying a bill to block Tesla sales there would “prevent unfair competition.”

In New Jersey, after some back and forth, a move to jeopardize Tesla’s sales licenses there stunned electric car advocates. Instead of waiting for legislative review, the Christie administration is going full speed ahead to block Tesla.

Why “Protect” the Car Sales Model?

In the past, the dealership model for car sales sprung up rather organically.

With new sellers of EV cars willing to sell direct, why impose obstacles? What’s the problem?

In other industries, no such protectionism exists. Retailers like Apple don’t need third party dealers to sell computers. To some, it would seem that new regulatory burdens just block the free market.

A closer look suggests some state houses just don’t “like” the electric car. Advocates of anti-Tesla legislation tend to hew along the same lines as, say, proponents of more domestic oil drilling. In short, new dealership enforcement laws might be another case of “greens vs. fossils.”

Fighting Back

Despite some of the stunning losses above, Tesla has won some victories. News from Indiana shows HB 1254 has been tabled there. It’s a similar bill to put protectionist dealer rules in place.

As for Tesla, the company has vowed to oppose these unprecedented laws. In Michigan, Tesla has sued the state government for the right to sell cars there.

In the fray, Elon Musk has called for a “popular uprising” against fossil fuels.

“The fossil fuel industry is the biggest industry in the world,” Musk said as quoted by Business Insider.

Time will tell how far the electric car revolution goes, and where sales will be legal in the U.S.