Should Tesla be Able to Sell Cars Direct to the Public?

Tesla vs Media Round 2
Tesla vs Media Round 2

Elon Musk, the dynamic leader of Tesla Motors, has certainly caught the headlines today amid claims that he is pressing the Texas lawmakers to allow him to sell Tesla vehicles direct to the motoring public. At this moment in time all vehicles need to be sold by a franchise, although there are claims that this is damaging short to medium term sales of electric vehicles - and could potentially be undermining their success. So, should Tesla Motors be allowed to sell direct to the general public?

The franchise system

The car franchise system has been in place in America, and indeed across the world, for many years now and offers a very useful backup service in times of trouble. It is this element of the system which is most in focus today amid signs that Tesla would like to deliver cars direct to customers whichever state they live in.

There is no doubt that car franchise companies do have a major say in the number of vehicles and the type of vehicles sold. There is no doubt that car franchises do have their favourites and indeed in many cases automobile companies have to fight for the best financial incentives. However, if Tesla is right in this assumption that sales in Texas alone could increase to 20% of total U.S. sales against just 6% at the moment, would this give the general public more opportunity to get involved in the electric car market?

Has Tesla rocked the boat once too often?

So far, the Texas law authorities have made no ruling on the demand from Tesla Motors, although we should hear some feedback in the short term. It is in many ways a very risky gamble by the company because if this proposed direct sales bill does not go through, then potentially Tesla may well have alleviated the car franchise network of America.

Quote from ElectricForum.com : "OnCars has just posted part one of its three-part series on the 2011 Tesla Model S:"

It is a very bold and a very ambitious move by the company, although the motoring public may well be in favour of such a proposition. Aside from the fact that Tesla would likely fund a large advertising and promotional program, focusing upon its cars alone, there is also the potential to cut out the middleman, i.e. the car franchise, and reduce the cost of the vehicle in the future. The Texas lawmakers will need to come up with some kind of ruling sooner rather than later and if they decide not to pursue this particular bill then they will need to explain their decision to the wider public.

Conclusion

While this is a very brave move by Tesla Motors it is perhaps one which the general public and the motoring public in particular can associate with. There is no doubt that by effectively missing out the middleman there are potential cost savings but there is also the fact that backup services could be impacted.

If you were to acquire a Tesla vehicle in a state which had no direct Tesla office, then where would you go if you had problems? How quickly could any problems be resolved? These are just a few of the questions which many people will be asking as the Texas authorities continue to mull over this request.