Tesla Direct Sales: NJ Exposed A New Paradigm of Retailing
This has far larger implications that extend to many other states, where franchise laws have protected independent dealers, in some cases since the 1930’s, by not allowing OEM automotive manufacturers to sell directly to retail customers, or to even own a store within that state. Tesla has been battling this issue as the success of their latest product – the Tesla Model S – has driven their growth and rapid expansion. While they have prevailed in a few states (Washington, New York & Massachusetts), others have only taken a firmer stance against them – including Texas, Ohio and Virginia.
Ultimately the Supreme Court may have to determine the future of the Tesla direct sales model. Dealer lobbies insist that the current franchise system is needed to help protect consumers, but the quality of automobiles has drastically improved and the internet has allowed consumers to research and shop without ever having to visit a dealer.