Report: New Jersey bans Tesla’s sale of cars directly to consumers

One of the growing debates in the evolution and emergence of the EV, mainly through Tesla Motors, has been Tesla’s new business model of selling cars directly to consumers rather than the old and standard method of independent dealerships. And it’s exactly that: old.

Several states have already banned the sale of Tesla cars directly to consumers in hopes to force Tesla to utilize a network of independent dealerships. This is in an apparent push to preserve competition and a manufacturer selling directly to consumers results in too much fraternization and promotion from the manufacturer itself. However, according to a simplified summary to the issue from Forbes, this is due to vertical integration and its use as a competitive strategy.

That said, state legislatures have been trying to preserve the old model of independent dealerships rather than allowing Tesla to proceed with their new business model of selling directly to the consumer. And recently, New Jersey just banned Tesla from selling directly to customers, joining Texas and Arizona. This could most likely be from the heavy lobbying power of dealerships at the state government level.

Source: TransportEvolved [1], [2]

Chris Chin

Chris Chin is the Editor-In-Chief of egmCarTech and is a regular contributor to Automobile Magazine.

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