Tesla fans take sales push to Obama

A petition to the White House to permit direct-to-consumer sales attracts 100,000 signatures.

By Jonathan Berr Jul 2, 2013 4:58PM
Tesla Motors CEO Elon Musk drives a Model S at the Tesla factory in Fremont, Calif. on October 1, 2011 (© Stephen Lam/Newscom/Reuters)Tesla Motors (TSLA) CEO Elon Musk's quixotic quest to bypass the nation's car dealers and sell his electric cars directly to the public is moving one step closer to reality.

A petition to the White House to permit these sales -- started earlier this month by a Tesla fan -- has attracted more than 100,000 signatures along with support from billionaire Richard Branson, requiring the Obama administration to issue a formal response. 

What that response may be is tough to say.

The National Automobile Dealers Association, a powerful lobbying group with members in every congressional district, is waging a fierce battle against Tesla. Of course, the industry has loads of influence on the state level as well. The association estimates that its members employed 963,400 people in 2012, up from 933,500 a year earlier.

As Steve Blank recently wrote in Forbes, industry lobbyists in New York and North Carolina are pushing new laws that would make it illegal for Tesla to sell directly to consumers. The company is facing similar fights in other states such as Colorado and Virginia, according to media reports.

"Having a dealer franchise network increases competition and forces down prices, saving consumers money," a NADA spokesman said in an emailed statement. "Consumers do better with multiple sellers, multiple retailers in a given market."

Tesla, whose Model S recently got a near-perfect score from Consumer Reports, wants to have 50 of its own stores by year's end, up from 34 in the first quarter. 

Writing in his blog last year, Musk argued that existing car dealers have a vested interest in touting conventional gasoline vehicles over electric cars since that is the source of most of their sales.

"It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business," he writes. "This would leave the electric car without a fair opportunity to make its case to an unfamiliar public."

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.


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105Comments
Jul 2, 2013 6:08PM
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"Consumers do better with multiple sellers, multiple retailers in a given market."  (NADA spokesman)

Bottom line - if the car is too expensive, people won't buy it.  If Tesla is willing to take that risk on,  I say let Tesla go for it!

What NADA really means is "Whaaaaaaa.  Make Tesla play with us...whaaaaaaa.....we want our share of their profits....whaaaaaa!!!!"
Jul 2, 2013 6:42PM
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If the automobile dealers do such a great service for the consumer then consumers will demand a dealer network for Tesla. Government should stay out of this issue and let Tesla sell its cars the way it sees fit.

Jul 2, 2013 6:27PM
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Ya gotta love it. The NADA is trying to crush competition in the name of competition. If having more dealerships forces down prices, then wouldn't having direct-to-consumer buys competing with the dealerships force down prices even more?
Jul 2, 2013 6:50PM
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Lobbyists are simply against free market enterprise.  Imagine if Apple were told it couldn't sell its products in Apple store but had to be sold through dealers.

Let Tesla sell its products the way it wants, provided no laws are broken.  If I could afford one of those, there would be one in my garage right now.
Jul 2, 2013 5:47PM
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Remove the welfare tax credit from the cars.

 

Government shouldn't have any say to who they sell to and how.

Jul 2, 2013 6:29PM
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gawd forbid a lobbyists actually work for a living. it's much to easy to take a cut of someone else's money.
Jul 2, 2013 6:57PM
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And this is where our claim to being a "capitalist" society falls flat on its face. Whenever the issues of raising taxes or regulating business come up, giant corporations and trade associations quash them to "defend capitalism", but as soon as a company tries to find a new way to compete with them, those same corporations and associations turn around and use the legal system to quash their competitors rather than trying to outcompete them. It's ironic that when Adam Smith published Wealth of Nations he posed capitalism as a way to do away with guilds (which he saw as hindering progress) that acted exactly like our modern "associations".      
Jul 2, 2013 7:43PM
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anyone should be able to sell their product in any manner they like. no one person, organization or government should be able to force them to do otherwise.
Jul 2, 2013 7:43PM
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Little Al,

Direst to consumers buys force prices down?

Of course it would.  That's the problem, it would KILL NADA's profits

 

ANY company that claims that a new competitor should not be allowed to compete with an established company, because the public would be hurt, is LYING.  The ONLY  thing to be hurt is the established company's profits. They don't WANT to compete!!  They want guaranteed profits.  Well, here's a clue, Capitalism DOES NOT guarantee profits; only state control can do that. If ANYONE say otherwise, they're GD LIARS!!!

Jul 2, 2013 7:31PM
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Have lobbyists STOLEN AMERICAN FREEDOM TOO!!!!

Don't you think it's about time to REMOVE ALL LOBBYISTS FROM OUR ONCE DEMOCRATIC GOVERNMENT??

Tesla, go one more better, PRODUCE A WORKING MAGNETICALLY-DRIVEN ELECTRICAL MOTOR FOR YOUR AUTOMOBILES and the American People will buy them REGARDLESS!

They are DAMN NEAR FREE to operate and they are 100% NON-POLLUTANT! Then, they CAN'T STOP YOU FROM SELLING DIRECT because you will no longer be in competition with them. Their automobiles are HIGHLY-POLLUTANT, i.e., A totally different brand!!!

Use Howard Johnson's 3 viable patents and we already have the AC/DC motor technology to make this conversion very quick!! GET IT DONE!!!!

Jul 2, 2013 9:16PM
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HEY......... how can this cost the consumer MORE???? NO sales markup for the dealer and the salesperson........come on this is just bull.........
Jul 2, 2013 10:49PM
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It's embarrassing that a company must petition the President himself just to be able to market their product in a way that others don't.  Sometimes I wonder:  what happened to our country?  This isn't the America I thought I would inherit.  The place I was raised in would never cut off an avenue of marketing a product.

 

And who the hell is NADA (wonderful acronym, by the way, considering what they are doing here) anyway?  And who died and dubbed them the arbitors of competition?

Jul 3, 2013 1:35AM
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Where do car salesmen rank on the most trusted profession scale? If I could by-pass the middle-man and still get parts and service, I'd be all over it. Just askin'
Jul 2, 2013 5:53PM
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As long as the government subsidize the company. Or have another country subsidize it. It should not matter if they sale it online. As long as they pay taxes.
Jul 2, 2013 11:23PM
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Should be able to buy "Direct" i.e. Wholesale! Dealers will inflate prices every time. As long as Tesla provides warrantee/repair shops I see no problem with it!
Jul 2, 2013 10:47PM
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I love my Tesla. I love my M-5 also. We live in a land of freedom of choice. I took risks and had the freedom to make choices, I was lucky after numerous failures, no one stopped me. I understand controversy over certain things in life but the ability to sell cars? Really? Tesla's price will come down as they get past their initial tooling and start up costs, just like all new technologies. They will produce more affordable EV's as they learn and improve efficiency. Even if their prices go up, it's their choice to try to run a business, there is nothing wrong with it.
Jul 2, 2013 10:25PM
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dealerships don't want competition !!!! if Obama denies him just shows you that monopoly of the trade !!! it like telling a retailer he must have a middle man to buy products !!!
Jul 2, 2013 11:39PM
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this is suppose to be a free market, meaning people should be able to sell what they want how they want, but does not mean people buy them, so they shouldn't need any government permission
Jul 2, 2013 5:55PM
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I meant say as long as any government does not subsidize it. That it pays all taxes like everybody does.
Jul 3, 2013 4:42AM
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It will be another EXCUSE just like all of the other petition response emails I have received.
This unfortunate nation has had the pleasure of being led by a bunch of weenie pussies for the past few decades. Get off your knees and taking loads in the face and kick some **** and stick up for what the people want.
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