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Tesla Petitions White House for Direct-Sales Permission

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On: Fri, Jun 28, 2013 at 4:53PM | By: Elizabeth Puckett

Tesla Petitions White House for Direct-Sales Permission

With states like New York, North Carolina, and Massachusetts looking to ban the sale and registration of Tesla models, and Texas already banning sales—the auto maker is asking the White House for help. The electric car company has plans to send a petition seeking support to the White House by the end of next week.

Tesla has special stores set up which act as showrooms for their vehicles in various states, so customers can see models and test drive cars (where allowed) before they buy directly from the Tesla website. There are currently 15 states with Tesla galleries, and New Hampshire is set to get the newest group of stores.

Tesla is trying to get 100,000 signatures from supporters who think all states should allow auto companies to sell their cars right to the buyer. The petition is still in need of well over 73,000 signatures as of the June 27th; their goal deadline is July 5th, 2013.

If this petition is taken seriously by the White House, this would eliminate the third party transaction in buying Tesla models. It could also impact the way people are allowed to buy many different models if other auto manufacturers are on board with the idea of direct selling to the consumer. The purpose is not to eliminate the dealerships entirely, but to offer people more options, and they would no longer be forced to go through the hassles associated with dealership purchases, unless they wanted to.

Currently, Texas is the only state that doesn’t allow auto makers to offer test drives directly to consumers or sell their vehicles to drivers without going through a dealership—with a handful of others looking to follow suit. Tesla shows its Model S sedan in the state, but it can’t actually sell any cars in Texas.

Texas law requires that new vehicles be purchased through a third-party, licensed dealer. Auto dealers in the state are protected from competition from auto manufacturers by law. The problem for Tesla is they don’t have any dealerships; there’re no dealerships that would lose business if Tesla Motors sold their own cars right to the buyer.

Why do the dealerships care so much? Because if Tesla was allowed to do it, they wouldn’t be able to stop any other auto companies from doing it as well. If auto makers sold right to the customer, they would undoubtably be able to offer much better pricing, and consumers would likely even have more confidence buying right from the source instead of buying from a third party. Many other industries participate in direct to consumer sales but also have retailers, why should the auto industry be different?

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