10 Reasons Why Tesla Should Be Set Free From Franchise Laws

Disruptively Chafing At The Bit

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To call Tesla “disruptive” is an understatement, as this term applies to its technology, its valuation and impact on the market, and its unorthodox business model.

Tesla’s Model S sedan has been lauded by buyers and reviewers, its stock has been trading at 1,200 times earnings with a market cap half of General Motors, and it’s restricted from selling in five states and counting.

On this last point, Tesla’s CEO Elon Musk has simultaneously acted like one with his back against the ropes, while still swinging both fists against the establishment, namely car dealer associations and their political supporters.

Of Tesla’s latest bout in New Jersey, Musk alleged crony capitalism, said consumers were being protected like the Mafia offers “protection,” and blamed the state of affairs on Gov. Chris Christie who he said went back on his word, and is now not being honest about it.

Tesla has previously had its moments against state franchise laws around the country, and in New Jersey it will be restricted from sales after April 1, with its two stores being limited to mere show galleries.

Tesla has stores or galleries in 21 states and the District of Columbia and at issue is its factory direct sales model.

This has upset state automobile dealer associations and state lawmakers who back them as Tesla has insisted against going through middlemen investor-franchisees as respective state laws mandate.

Tesla locations

The New Jersey restriction adds to already limited Arizona, Maryland, Texas and Virginia, and moves are underway to possibly add New York and Ohio to the list.

Full-fledged Tesla “stores” are those in which Tesla has been made free by the powers that be to talk price, and help people order a car if they wish. Galleries are restricted from these activities, but in no case is Tesla like other car dealers.

It locates its centers in high-traffic retail areas, typically a mall, and pays non-commissioned associates to be open, upbeat, and discuss EVs freely without pushing to close a sale.

In its support, Tesla’s fan base and general well-wishers have been more than a little bit outspoken on Tesla’s behalf. And underlying it all is Tesla’s own assertions that this is best for its business.

It’s been alleged that vested interests with potentially much to lose may be actively hoping to see it fail, or lobbying to trip it up.

If you’ve been following Tesla, no doubt you’re already aware. For those who want a primer on what Tesla has said is a morally just cause, and essentially a better way to do business for all, we put together 10 points, though perhaps more could be added.

These are all points Tesla itself makes, and they’re largely supported by Musk’s own words from Tesla’s official enthusiast blog posts.

We asked Tesla’s Alexis Georgeson last week for commentary, and she sent over three blog posts which we’d already gone through to cull the following points.

After we post this we’ll be doing more on The Tesla Question, exploring issues in greater depth, and with counterpoint from those who don’t see things Tesla’s way, as well.

But to get started, here are Tesla’s reasons for why it should be set free to do business its way, according to Tesla.