Tesla Direct State Sales - Political or Politics?
It mostly comes down to current laws on the books. Many states already had automotive dealer franchise laws - had them for many years. So when Tesla came along - in spite of their innovative products - they were largely viewed as another auto manufacturer that simply had to comply with current laws. In some cases they earned waivers from those, or had to structure their Showroom business to work through the legal fine print.
In NJ – and possibly NY and Massachusetts - it appears that Tesla may have simply been granted waivers for their showrooms to conduct business simply because no one really expected them to succeed. No one took them seriously or really expected them to last, but they did produce an electric car (which many governments viewed as a positive), so – lets give them a waiver and let them take their best shot. After all, the auto industry has a terrible success rate for new brands trying to make it in this market - just look recently at Fisker or Coda. Even more established brands such as Hummer and Saturn didn’t make it. So how seriously did some states, or the industry, take Tesla when they started requesting the ability to sell through their own showrooms? Sure – why not – they won’t be around for long anyway.
But surprise - Tesla turned out to be a winner! They earned accolades for best car ever tested by Consumers Reports. They produced an electric vehicle which finally had enough range to make it a viable transportation alternative for many. They are Silicon Valley based, are led by the greatest Silicon Valley wiz since Steve, they are innovative, they are growing, and they are succeeding. Wow! – who would have thought?
But all this means that NOW they are noticed by the industry. (Want to guess how many big automakers will "suddenly" have all new, all electric luxury models out in the next few years? My guess is - all of them.) So the dealer lobbies in many states, most notably NJ, now begin to see Tesla as creating a threat to their sacred franchise system. And at that point it became simple politics.
Dealer lobbies are plentiful, they have a lot of money, and they have political influence. So they simply played their cards. In NJ the Tesla waivers were due for renewal, as well as their application for a 3rd store. But politics being politics meant that the governor could not ignore his constituency – so, waiver renewals denied. You can see the thinking – “Let’s cut off that threat before it becomes really serious.”