Tesla supporters petition White House for direct sales

Tesla Motors’ fight over direct sales went grass-roots earlier this month with the launch of a petition to allow straight-to-consumer transactions in all 50 states.

The Palo Alto maker of high-end electric cars has been in a tussle with traditional dealers in several states over its standalone sales model. Dealers and their advocates say Tesla is breaking state laws that require automakers to sell cars through franchise dealerships.

The petition from Telsa backers argues that state politicians should stay out of a simple transaction between willing buyers and sellers.

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“States should not be allowed to prevent Tesla Motors from selling cars directly to customers,” the fan-created petition reads. “The state legislators are trying to unfairly protect automobile dealers in their states from competition. Tesla is providing competition, which is good for consumers.”

The petition aims to get the attention of the White House through We the People, a government-run site where online users create petitions for their causes. Organizers must collect 100,000 signatures in 30 days to prompt a review of the issue by the administration. 

As of Saturday morning, the petition started June 5 still needed more than 39,000 signatures.

Legislators in North Carolina, New York and Minnesota have scrutinized Tesla’s sales model this last year. The luxury electric automaker relies on phone and online orders, as well as in-person sales excluding its “gallery” showrooms in Arizona, Texas and Virginia, where state law bans direct sales. Tesla has 31 stores and galleries across the U.S., nine of which are in California.

Galleries are usually found in shopping malls, where Tesla employees keep just enough cars on hand for display or test drives. Haggling is verboten – the electric cars are sold at sticker price, starting at $62,400 for Model S sedans and climbing to well over $100,000 if a customer springs for a larger battery and custom packages.

Tesla chief executive Elon Musk has resisted embracing the traditional dealer franchise model. He took to his company’s blog in October to argue that the model creates a conflict of interest. Assuming the low-volume Teslas would have to be sold alongside traditional gasoline cars, "it is impossible for (sales associates) to explain the advantages of going electric without simultaneously undermining their traditional business," Musk wrote. 

That hasn’t made Tesla many friends among auto dealer associations. In states where Tesla is prohibited from conducting direct sales, employees aren’t allowed to take customers – or window-shoppers, really – for test drives, nor are they allowed to mention the price of the cars, let alone take orders. Buyers can purchase the cars online, but have to arrange for delivery through a third-party shipping company. Two Texas bills aiming to allow Tesla to conduct direct sales failed to make it to vote in May, Reuters reported.

North Carolina lawmakers killed a bill in the House this month that would have blocked online sales in the state and would have forced Tesla to sell through franchised dealers. That model, according to the dealer associations, protects the consumer by preserving competition between dealerships, which butts heads with Tesla’s no-haggle prices. 

According to Automotive News, similar bills in Minnesota and New York were blocked in March and June, though lawmakers in the Empire State may take up the legislation again when they reconvene in January.

Tesla hasn’t ruled out selling through franchise dealers in the future, but company reps have said the carmaker would like to keep hold of sales on the specialty electric vehicles for now.

“Tesla's goal is to catalyze the market for EVs,” said Shanna Hendriks, a spokeswoman for Tesla. “In every state, except for Texas, we have been defending our ability to lawfully sell vehicles and educate customers in a new market. We are happy with the way things have gone so far, but expect we will continue to face opposition.” 


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