Tesla facing dealership challenge over its ownership of factory stores

Article by Anita Panait, on October 9, 2012

Elon Musk’s strategy to sell Tesla vehicles involves opening a number of factory stores and replicating the Apple experience in them. Tesla has successfully opened 17 factory stores 10 states and the District of Columbia, mostly in shopping malls. The electric carmaker is also set to open six more stores this fall.

However, the carmaker is facing challenges from a number of dealer associations and state regulators in at least one case. These detractors claim that Tesla's stores violate state franchise laws that prohibit factory ownership of dealerships.

Protesting dealer associations also claim that Tesla's factory stores pose unfair competition for competing dealerships.

They also claim that these stores are inconvenient for consumers who need to have their vehicles repaired. These dealers associations say that if left unchallenged, Tesla stores threaten the franchise system.

Bob O'Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association, remarked that Tesla’s factory store format, if successful, could be replicated by another carmaker which also builds electric vehicles.

O'Koniewski, described Tesla’s format as a separate system that bypasses dealers that it is “extremely problematic."

The New York State Automobile Dealers Association, on the other hand, has commissioned dealer lawyer Leonard Bellavia to write a report for an upcoming newsletter on the threat of BMW using a direct-to-consumer model to sell its upcoming i-car line of electric vehicles.

BMW has remarked that it plans to sell its i-cars through U.S. franchised dealers. Tesla, meanwhile, quipped that it is doing everything to comply with state and local laws

George Blankenship, Tesla's vice president of sales, said that the carmaker does whatever state and local laws allow them to do. Blankenship remarked that Tesla’s sales method is unique for each location.

Topics: tesla, dealership

If you liked the article, share on:

Pin It

Comments

Recommended

Tesla marked a major milestone as it surpassed Ford in market capitalization. Automaker Tesla, formerly known as Tesla Motors, closed out the trading on March 27, 2017, with a market...
by - March 30, 2017
The mid-cycle facelift for the Mercedes-Benz's S-Class have been disclosed to the public eye via these leaked shots. The images that recently surfaced and others like it were published online...
by - March 30, 2017
Reddit user Jdubbswrx spotted a rather deceptive move coming from the German automotive manufacturer Audi. He posted an image of the supposed exhaust of the new 2018 Audi SQ5 sporting...
by - March 29, 2017
McLaren car owners will be thanking the automotive company as it has decided to roll out new goodies for the 540C, 570S and 570GT sports car line-up. From this series...
by - March 29, 2017
On July 11, Audi is set to reveal its flagship luxury sedan, the all new A8. And at this moment, none of us are sure how this model will look....
by - March 29, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries