Sat 29 Mar 2014
Perhaps I’m missing something.
With regard to the issues being argued around Tesla’s direct-to-consumer sales model and the legality of such – while the concerns of auto dealers (profitability, sales guidance, and service facilities for customers) have merit, the lower maintenance architecture of all-electric vehicles do give rise to the need for new “thinking” in terms of the models that manage and regulate the related activities and processes. The point of this post though is NOT to argue those merits, but to suggest what seems a relatively straightforward solution for Tesla.
State laws at issue appear to prohibit the sale through other than an independent intermediary. It is not unusual for companies to have exclusive contractual arrangements which also include many other stipulations. In that regard, would it not be a reasonable solution for the “galleries” through which it displays and facilitates remote-purchase of its vehicles to be independent, to have territorially exclusive ability to non-electronically “show” the product, in exchange for being bound to strict operating requirements. And included in such contract could be the payment by Tesla of the operating costs they would otherwise spend on the Galleries had they been owned by Tesla – protected by the operating requirements (which may be subject to revision yada yada yada).
Perhaps this is too naive as an outsider perspective, but in essence, the facilities would be light-weight and lean virtual art galleries with physical examples as well. Disruption is sometimes mostly in mindset. In looking at the requirements (on the Motor Vehicles pages of a few states – for example NJ or VA) there are specific requrements, but they do not seem insurmountable (NJ requires TWO vehicles) relative to what may already be in place in an existing Tesla Gallery.