Planet Gore

Did Tesla Just Change the Auto Industry As We Know It?

Quite possibly, yes. But not with its electric car.

A New York judge has just ruled in favor of Tesla allowing direct-to-consumer sales of its cars, bypassing a dealer network:


Tesla Motors Inc. says it’s won another round in its fight with established car dealers who want to stop the company from selling its electric luxury cars directly to consumers.

Tesla CEO Elon Musk says, via Twitter, that a New York judge has tossed out a suit brought by New York auto dealers who challenged Tesla’s direct sales model as a violation of the state’s franchise laws.

Mr. Musk spent Wednesday in Texas making the case for a legislative proposal to change the law to allow direct sales of electric vehicles by U.S.-based manufacturers.Texas car dealers have opposed the measure, saying it would open the door for other car makers to sell electric cars direct to customers –  which could undermine the value of their franchises.

There are pluses and minuses to a dealer network, but at this time a consumer can’t buy a car directly from a manufacturer. And there are savings to be had if a consumer could do so. Charles Arlinghaus writes in the Union Leader:

A recent paper by the economic analysis group of the Department of Justice found potential savings of as much as $3,000 per vehicle from the currently prohibited direct-to-consumer sales of vehicles. In recent years, direct sales have been promoted by groups as diverse as the libertarian Cato Institute, the moderate Democratic Progressive Policy Institute, and the liberal Consumer Federation of America.

I’d, at the very least, like the option to purchase a car directly from the manufacturer and then use my own mechanic for its regular maintenance. 


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