FTC Defends Tesla’s Right to Sell Direct to Consumers

In a new blog post today, three high-ranking FTC officials effectively defended Tesla’s right to sell their vehicles directly to the public.  Their key argument:  Consumers should have the right to choose how they buy goods and services under the principle of free-market competition and not state regulation.

Tesla has struggled with state regulations, which restrict vehicle manufacturer’s from selling cars directly to the public.  Such laws were apparently designed to protect consumers, but now seem to help only auto dealers.

New Jersey, in particular, has been tough for Tesla.  The state outlawed the firm from selling directly.  Recently, however, Governor, Chris Christy began easing the ban, allowing the manufacturer from selling through a number of limited outlets.  Other states with similar legislature have also followed suit by allowing limited sales.

Other states, such as Michigan, decided to move in the opposite direction to free market competition by strengthening legislature that prevented auto manufactures from selling directly to consumers.  That said, the governor stated that a conversation should be started over whether the current legislature in Michigan should be changed.

A recently introduced bill in Michigan will help encourage such a conversation.  The bill, designed to reduce the prohibitions for a vehicle called an ‘autocycle’ and conceivable reduce the barriers for direct consumer sales by new automakers.

Autocycle manufacturer, Elio Motors,  plans to offer innovative three-wheelers in Louisiana at the beginning of next year directly to consumers and without building a dealer network.

The FTC has made it obvious in the past that it supports Tesla’s rights to sell its products.  However, this new blog post is probably the most significant show of support to date.

Posted by: Farra Majid on Monday, May 11th, 2015 at 9:16 pm in NEWS