Car dealers across the country are feeling threatened by Tesla's model of selling their cars directly rather than through independent franchises. But North Carolina may go further than any other state has gone by making it illegal for Tesla to bypass dealerships.
Of course, this law would apply to any manufacturer who wants to try and eliminate the middleman, but it's clearly aimed at Tesla. The bill was unanimously approved by a senate committee last week, according to the Raleigh News & Observer, and it's one that's backed by the N.C. Automobile Dealers Association.
Here's what they reported:
The whole misunderstanding would go away, the dealers say, if Tesla sold its cars through licensed dealerships. [Tesla VP Diarmud] O’Connell countered, in essence, that displaying a Tesla in a showroom of subcompacts and SUVs would be akin to selling Dom Perignon in the food court at the local mall.
Nor would it necessarily make economic sense for Tesla to open its own dealership; the company on Wednesday just announced its first quarterly profit.
But it’s not Tesla per se, that worries the dealers. It’s the precedent. The prospect threatens the livelihood of North Carolina’s 7,000 licensed dealers, who invest millions in building big lots and showrooms to efficiently move product, say supporters of the bill.
“We care about the franchise system,” said Robert Glaser, president of the N.C. Automobile Dealers Association. “The whole point of the retail system is to protect the consumer.”
Right. Because the car dealership system has always done such an excellent job of protecting the consumer.
The bill's sponsor, Republican Sen. Tom Apodaca, said the bill is really about preventing unfair competition between manufacturers and dealers, but he never said exactly what he means by unfair competition. And Tesla has had a strong showing as of late, having outsold its German competitors in the last quarter.
Tesla has had to deal with this dealership issue in other states, most notably Texas. (For more perspective on this, check out what DC Auto Geek had to say.)
But while dealers say they're standing up for buyers, it's hard to see these laws as anything more than them — and their powerful lobbying — trying to protect their livelihood. It's hard not to take Tesla's side on this one.
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