Washington Reaches Tesla-Dealer Compromise: Can’t We Just Be Friends?
Tesla Motors (NASDAQ:TSLA) has been met with varying degrees of enthusiasm in various states nationwide over its “controversial” business model that has pitted automotive dealers against the electric vehicle maker. The issue was recently thrust into the spotlight after New Jersey, in what Tesla described as “back-room dealings,” unanimously voted to ban Tesla’s direct sales method beginning on April 1.
Arizona, on the other hand, looks like it could pass a legislative bill that would allow Tesla to continue selling its vehicles through company-owned locations, in a move seen as a sort of courtship for Tesla’s Gigafactory bid, which is expected to bring huge economic benefits to its hosting state.
While it appears to be a black-and-white issue in many places, recent results from Washington state indicate that there may be a happy medium between the extremes. A bill set forth in Washington’s capitol of Olympia originally included restrictions placed on Tesla’s ability to sell in the state, though a group of bipartisan legislators were able to strip the bill of its anti-Tesla content so the company wouldn’t be forced to conform to the traditional dealer model.
However, the resolution in Washington was unique in that it offered some peace of mind for the dealers, as well. Reuters reports that in the revised language, the bill would also strengthen the existing rules that require other automakers to sell through their stores. On the surface it seems like Tesla is being given a free pass, but it’s important to remember that the fight is between Tesla and the dealers — not Tesla and other manufacturers. Everyone walked away a winner, at least from this round.