A White House petition to allow Tesla Motors to sell straight to consumers throughout the U.S. surpassed the 100,000-signature threshold it needed this week to prompt response from the administration.
“States should not be allowed to prevent Tesla Motors from selling cars directly to customers,” the petition created June 5 by a user in Stow, Mass., read. The system available on the White House's website lets users to create petitions for their causes, and requires petitioners to collect 100,000 signatures within 30 days before the administration will officially acknowledge them.
“The state legislators are trying to unfairly protect automobile dealers in their states from competition," fans of the luxury car brand wrote. "Tesla is providing competition, which is good for consumers.”
Dealers associations in several states have countered that argument, saying it’s the franchise dealership system in fact that encourages competition and protects customers. “Consumers do better with multiple sellers and multiple retailers in a given market,” a spokesman for the National Automobile Dealers Assn. said. “If all the stores that sell Ford vehicles were owned by Ford Motor Co., for example, what incentive would there be for any of the stores to sell a vehicle for less than manufacturer suggested retail price?”
Tesla recently faced a series of legislative battles with dealers associations in New York, North Carolina, Massachusetts and Minnesota. Groups in each state challenged the carmaker’s refusal to abide by traditional sales models, sidestepping franchise dealerships to sell straight to its customers online, by telephone, or in some states, inside Tesla stores. Tesla proposed legislation to allow direct sales in Texas, where employees in showroom “galleries” are not allowed to offer test drives, take orders or discuss the price of the Model S, but that bill was shelved in June. Tesla is also trying to get approved for a license in Virginia.
Tesla declined to offer formal comment on the petition, but Shanna Hendriks, a spokeswoman for the carmaker, said it wasn’t due to indifference. “We’re thrilled,” Hendriks said by phone Wednesday. “The groundswell of support that came with (the petition) is really impressive. The ball is in the White House’s court.”
But the NADA said the federal government shouldn’t have a hand in how individual states handle auto sales. “The states have decided that it is in the public interest to require a local presence for the sale, distribution and servicing of the automobile, which is a necessity of modern life,” NADA spokesman said. “All auto manufacturers should be required to play by the same rules.”
Kirk Brown, managing director of electric car advocacy group Plug In America, said support evidenced by the petition was important. “It underscores that we need to continue clearing obstacles in the path for electric transportation, and that there is large and growing market developing for these game-changing electric vehicles,” Brown said. “A new and improved transportation sector is indeed here. Now we need to continue nurturing it.”
Jay Friedland, Plug In America's legislative director, said the political sway of auto dealer associations at state and local levels would likely be a formidable foe. He noted that car sales contribute a substantial amount of state sales taxes, which might add to the dealers' case. But Friedland also cited a 2005 Supreme Court ruling that prohibited restrictions in Michigan and New York on sales by out-of-state wineries.
Friedland said interstate commerce would likely play a role in any developments in Tesla's case, but "all politics are local. It would be an interesting challenge to get a bill through Congress. But things like that have been done before, so there is a possibility."