Letter To Legislators From 10 Organizations Backs Tesla Against Dealers

This week a diverse coalition of organizations issued a letter to U.S. governors and legislators in support of the struggles Tesla Motors is facing politically and legally in selling and servicing its cars factory direct.

Ten signatories of the letter include the Sierra Club and the Koch brothers. In all, the alliance includes three free-market groups, four competition and consumer-protection organizations, two environmental organizations and the Information Technology and Innovation Foundation.


• American Antitrust Institute
• Americans for Prosperity
• Consumer Federation of America Consumer Action
• Consumers for Auto Reliability and Safety (“C.A.R.S.”)
• Environment America2
• Institute for Justice
• The Information Technology & Innovation Foundation
• Mackinac Center
• Sierra Club – National

Initiated by Daniel Crane, associate dean for faculty and research at the University of Michigan Law School, the letter states this is not only about the embattled automaker facing opposition from auto dealer associations and supportive legislators.

“Tesla’s market entry through direct distribution is providing consumers with beneficial new choices on what vehicles they buy and how they buy them,” the groups said. “Moreover, our concerns are not limited to Tesla, as these laws have similarly negative effects on any company seeking to distribute their cars directly to consumers.”

The back and forth issues have seen Tesla more-often the overwhelming favorite in the court of public opinion, even as it faces strong opposition among government leaders and dealers in states like Michigan, New Jersey, Texas, and elsewhere.

Tesla has consistently said it faces a monopoly against powers-that-be, entrenched in an archaic system ostensibly in favor of consumers, but fraught with unfair policies favoring dealers.

Dealer associations have offered varying arguments from a defensive position. Among these, they’ve said all other automakers must play by these rules so why should Tesla get an exception? Citing companies now gone, like Fisker, they’ve said consumers are protected by a third layer which state regulators have upheld as a valid public safety concern.

They’ve said car-buying bargaining power for the consumer is better, and National Auto Dealer Association statistics show consumers armed with dealer cost playing competing franchises against one another has substantially driven down net profit on individual vehicle sales.

More arguments than these have been levied, some either dismissed or not raised in most media reports at all.

SEE ALSO: Tesla vs. The Auto Franchising System – Introduction

Undeterred, Tesla and supporters have objected with deep conviction in return.

Tesla maintains its cause is the just one as it deserves the ability to sell cars and service its customers the way it needs and wants. It has said this is a free market and democratic ideal and on principle. Company CEO Elon Musk has suggested the present system is protectionist in the wrong way at the expense of citizens and consumers.

Passions tend to flare over these issues even if full treatment of all the nuanced factors rarely is brought to the light of day in public discussion.

But if it is a populist cause, while it has seemed Tesla has been fighting nearly alone against the controllers of the automotive sales and service world, it now has 10 more allies in addition to its many supportive fans.

Copy of letter.

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