The Tesla backlash

The bogus Tesla backlash: What if the Internet saves the middle class? - Salon.com
The immediate context for this intriguing argument is Tesla’s ongoing fight, across the United States, with established car dealerships. Tesla wants to sell cars directly from its website, thereby cutting out the middleman.


The middlemen are not amused, and they are leaning on their political connections to squelch the Tesla challenge. In North Carolina, reports Coppage, “the state Senate’s Commerce Committee recently unanimously voted to approve a bill, backed by politically powerful auto dealers, that would prohibit direct sale of automobiles over the Internet.” It is also already against the law in nearly every state, for manufacturers to directly sell their own automobiles, online or off.


You don’t have to look hard to find press coverage of the fight that is distinctly unsympathetic to the dealerships. They’re dinosaurs who have outlived their time, depending on their connections to preserve quasi-local monopolies that keep car prices higher than they should be in a perfectly competitive free market! They’re a classic example of unnecessary “friction” in the system. Consumers used to getting what they want, when they want it, with just a couple of clicks, are naturally dumbfounded at the notion that cars are somehow off-limits.

Interesting issue. On the one hand, I think the innovative approach to selling directly is a great thing for the customer. Conversely, it basically turns all dealerships into used car dealerships and/or service centers. My biggest concern would be the number of jobs lost from the economy.

Anyone familiar with the inner workings of the dealership industry that can shed some light on this?