Dealers would do Tesla a disservice

Tesla offers a unique buying experience through its company-owned stores.

(Credit: Getty Images)

Last week, New Jersey informed Tesla it would require the California automaker to only sell cars through licensed in-state dealers, forcing it to stop selling cars through its own stores by April 1. Arizona and Texas have similar rules in place, effectively banning Model S sales in those states.

These state rules may come as a surprise to most people, but they have been on the books for a while. CEO Elon Musk, in a blog post on Tesla’s site, actually defends the intent of these laws. Musk points out how, after an independent dealer built up a business, an automaker might put pressure on the dealer, such as restricting product supply, to force the dealer to sell the business to the automaker. In the same post, Musk complains that now the auto dealers are using the rules to prevent competition from Tesla, which was not the original intent.

In New Jersey and other states currently banning Tesla’s direct sales, Tesla could turn to an in-state licensed dealer to sell its cars, but that would be a bad idea.

Setting the tone When I visited one of the first Tesla stores in downtown San Jose a few years a… [Read more]