Politicians, Car Dealers Trying To Make It Illegal To Buy A Tesla In North Carolina

from the hating-on-disruptive-innovation dept

Last fall, we wrote about how auto dealers were bitching about the fact that electric car company Tesla sells their cars directly. It has "stores" but you can't buy your cars from those stores, due to antiquated and ridiculous regulations about car sales. Most states have laws that basically say that car companies can't sell directly. These laws serve no purpose other than to protect (often politically powerful) independent car dealers from being disintermediated.

In North Carolina, however, they're taking it up a notch. They're basically trying to make it illegal to sell a Tesla in North Carolina at all. About 80 North Carolina residents have already bought one, but they may be the last:
A legislative proposal, backed by the N.C. Automobile Dealers Association, would make it illegal for Tesla, or any other car maker, to bypass dealerships and sell directly in the state. The proposal cuts at the heart of Tesla’s business model: selling luxury cars over the phone or Internet and then delivering them to the front door of high-net-worth customers.
The North Carolina State Commerce Committee approved the proposal unanimously.

This is the same thing we see over and over again in other contexts. Companies in an entrenched legacy position trying to use regulations to block disruptive upstarts. There is no good reason for this law other than to block Tesla and to prop up dealerships. It's somewhat disgusting to see politicians actively seek to stamp out innovation.

Filed Under: dealers, north carolina, regulations, tesla
Companies: tesla


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  1. icon
    fogbugzd (profile), 13 May 2013 @ 10:13am

    Regulations that only serve to protect existing businesses always come back to haunt the industry they were intended to protect. Part of the motivating force behind Telsa's business model was a desire to stay out of the dealership quagmire that exists in most states. It will be interesting to see if Telsa teams up with other players at the national level to get federal action to overturn the antiquated state laws en masse. The same laws that kept dealerships protected have in many cases limited them from growing into the internet market. They could be in a lot of trouble if they suddenly have to compete.

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