Tesla stands victor in North Carolina direct car sales battle

Jun 27, 2013
3
Tesla stands victor in North Carolina direct car sales battle

Last month, North Carolina state auto dealerships kicked up a fit over Tesla's direct car sales approach to getting its Model S into consumer hands, spurring a legislative proposal that would ban such a retail method. New York followed soon after, and in both instances Tesla pushed back, saying that selling the Model S in a dealership was like selling fine wine in a mall's cafeteria. While the legislation is still going through, the provisions that would halt Tesla's direct-sales have been removed.

North Carolina has been a Tesla favorite, with the auto maker having sold - as of last month - 80 Model S sedans in the state with another 60 on order. Such a relatively large purchase quantity was augmented by the launch of a Tesla service station in the state. This popularity was not well-received by state dealerships and car salespersons because of the method used to sell the vehicles that left them out of the process, however.

The Model S sedan is sold both online via Tesla's website, and also via retail stores the auto maker has in various locations, where interested customers can purchase the vehicle straight from the company itself, no hassle with dealers necessary. There are two perspectives on this approach: one group says direct sales are good for consumers by creating competition, and dealerships say direct sales are harmful to their businesses.

Although the legislation had passed the state's Senate with the Tesla-hampering provisions in place, the North Carolina House stripped those parts out, though Tesla was not mentioned by name. It was Senator Bill Rabon that requested the House Transportation Committee push through a revised version of the bill. He went on to confirm that such a request was accepted when interviewed.

In addition, he went on to state that the previous version - which included the anti-direct sales provisions - will not be back in play again. Not surprisingly, Tesla praised the move, saying: "I think folks understood that this was an attack on the free market, that this would have precluded North Carolinians from having the freedom to choose the cars they wanted to purchase. The House leadership understood that."

SOURCE: News Observer


Must Read Bits & Bytes