Tesla Motors won a big ruling in Massachusetts when the state supreme court dismissed a lawsuit by local car dealers. Elon Musk wants this ruling to mean something more nationwide, but dealers are still standing in the way, according to Automotive News.
“The justices in Massachusetts very clearly have said in their estimation that the franchise practices act in Massachusetts, which is quite similar to the franchise practices acts in New Jersey and many other states, was to govern behaviors between manufacturers and their affiliated dealers and that further, these acts are not set up to constrain other behaviors or other business models such as ours,” Diarmuid O’Connell, Tesla vice president of corporate development, said in an interview with AN.
Tesla is currently locked in a battle with New Jersey, Georgia, and now Michigan to allow their direct sales model to compete with standard car dealership franchises. Dealers say that the Tesla model gives the company an unfair advantage and puts consumers at a disadvantage when it comes to negotiating a price. They have an embedded advantage in many states, despite support from some of the nation’s largest car dealer chains. And because the Massachusetts Supreme Court struck down the dealership lawsuit based on a lack of standing to file suit, the court’s arguements may be ignored by other states.
The counter argument to that is the wild success of similar direct sales models like the one used by Apple, and anyone who has purchased a Tesla Model S can tell you the buying experience is a lot better than anything a typical car dealer has to offer. The no-pressure sales by salaried (rather than commission-based) employees and ability to custom build your car to your exact specifications has made the direct sales model popular with buyers.
While a few states have moved to approve Tesla’s right to sell its cars, other states continue to put up a fight, and the company continues to look for a solution at the Federal level. For the time being though, it’ll continue to be a state-by-state fight.