Tesla Doesn't Need Dealers In Massachusetts, But The Rest Of The U.S. Is A Different Story

Elon muskToru Hanai/ReutersYou’re on notice, car dealers!

Tesla triumphed this week in a legal case again car dealers in Massachusetts.

The dispute took two years to resolve, according the Wall Street Journal. But it doesn’t mean that CEO Elon Musk’s electric-car company will be able to achieve its goal of selling directly to consumers throughout the U.S.

As the Journal’s Mike Ramsey notes:

Dealers are trying to prevent contagion of the direct sales methodology to other auto makers. Today, every new car in the U.S. — other than Tesla — is sold through an independent dealer. Most states have a thicket of laws preventing manufacturers from terminating dealer franchise agreements and barring manufacturers from competing with the dealers.

Musk appeared on Fox Business on Wednesday and, when asked about breaking the car-dealer “cartel,” slightly sidestepped the bare-knuckled politics of the issue. He insisted that Tesla wants the end customer to enjoy the best possible experience of buying a Tesla vehicle.

Musk doesn’t want to fight this battle state-by-state — he’d probably rather have Tesla benefit from a changing tide of legal sentiment sweeping across the land and compelling states to allow his company’s direct-sales model, carving out an exception to the way that dealers have traditionally operated.

But dealers aren’t interested in even a modest erosion of their protections. It’s not like Tesla is the first car company to attempt some type of direct sales. Even the major automakers have experimented with the idea, only to feel the wrath of dealers.

And therein lies Tesla’s problem. Musk may not want to grind out the battle state-by-state with car dealers, but they will be more than happy to force him into legal trench warfare.

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