Tags: tesla | direct | sales | consumers

Tesla Direct Sales to Consumers Would Be Protected Under Petition

Image: Tesla Direct Sales to Consumers Would Be Protected Under Petition

Thursday, 27 Jun 2013 10:51 AM

By Michael Mullins

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A Tesla Motors supporter has begun a White House petition to allow the electric car company to "sell directly to consumers in all 50 states."

Tesla, which unlike most automakers does not sell its vehicles through third party dealerships, sells directly to the consumer, according to CNET.

Unwilling to provide his last name, the Tesla fan responsible for the petition named Ken, said he did not work for the Silicon Valley-based automaker, but was a shareholder and hoped to one day own one of its vehicles.

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"The state legislators are trying to unfairly protect automobile dealers in their states from competition," the fan writes in the petition. "Tesla is providing competition, which is good for consumers."

As of now, only Texas prevents direct sales from car companies to the consumer.
There are, however, several other states considering a similar ban, CNBC reported.

Auto dealers exercise a substantial amount of political sway in local state governments considering car dealerships generate a large amount of taxes on the local level and are known for making sizable donations to state lawmakers, according to CNBC.

If consumers were to buy directly from the automaker, the middle-man at the car dealership would be negatively impacted, which is why the franchise laws are so strong.

Whereas as major automakers such as Ford and Toyota sells its vehicles through a licensed third-party dealership, Tesla has long resisted that course.

In its defense, Tesla CEO Elon Musk argues that as long his company does not have dealerships, their direct sales campaign is not hurting other car makers.

Musk adds that whereas many other companies in other fields are permitted to sell their product directly to the consumer, why should automakers not be allowed to as well, CNBC reports.

As of Thursday morning, the online petition to the White received just over 18,500 signatures.

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It needs another nearly 81,500 signatures by July 5 to receive a response from the White House.

In May, Tesla Motors cut a $451.8 million check to the government, paying back in full their 2010 loan with interest, from the Department of Energy (DOE) some nine years before it was due.

Tesla has long received a significant amount of criticism, primarily from conservatives for its reliance on a federal handout to sustain operations.

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