Simply put, Tesla has a different way of selling its product. Unlike traditional dealers, Tesla showrooms are oft found in shopping malls, and mostly sold indirectly due to many states making it difficult on the Palo Alto, Calif. automaker to sell their $71,000 Model S they way they want to.
The state of Michigan, for example, bans direct sales by Tesla. Last month, New Jersey lawmakers backed by the New Jersey Coalition of Automotive Retailers approved a regulation that would require new-car dealers to obtain franchise agreements in order to receive state sales licenses.
Tesla has fired back in the New Jersey case with an appeal stating: “Franchise dealers have an inherent conflict of interest in selling electric vehicles,” Tesla said in the appeal filing. “In order to do so effectively, they would need to enthusiastically tout the reasons why electric vehicles are superior to gasoline vehicles. This is not something that they are going to do, since gasoline vehicles represent virtually all of their revenue.”
It’s all part of what makes Tesla different. Like Apple Inc., they prefer to retail at company-owned outlets rather than sell through independent, franchised dealers.
Tesla CEO Elon Musk doesn’t want to be seen as just another automaker, writing in his blog that since Tesla’s technology is different and the car itself is different, it’s stores must be different as a result.
Plans for a large lithium-ion battery Gigafactory in in Arizona, Texas, New Mexico or Nevada may help Tesla score with the masses by creating a more affordable $35,000 model.
But in places like Michigan and New Jersey, people are still weary of Tesla because they feel Tesla is trying to circumvent the rules.
Jim Appleton, president of the New Jersey dealer group, said he disagrees with Tesla’s assertion in their court filing that dealers are conflicted about selling electric cars.
“Dealers want to sell what the consumers want to buy.” Appleton said. “We want Tesla to play by the same rules.”