You can buy almost anything on the Internet: uranium ore, wolf urine, a levitating hover scooter. But you can’t buy a car straight from the factory. Go to the Web site of Ford or Honda or any other major automaker, and they will send you to your local dealer to conduct anything resembling an actual transaction. It isn’t an accident. Rather, it is the result of hard-fought efforts by auto dealers to maintain, through state laws, their exclusive role as the place where one can buy a new automobile. Direct sale of autos by manufacturers is against the law in nearly every state, and there’s a range of related state laws governing auto dealers’ ability to enter or exit a market.
The new bill aims to maintain that:
Its sponsor is state Sen. Tom Apodaca, a Republican from Henderson, who has said the goal is to prevent unfair competition between manufacturers and dealers. What makes it “unfair competition” as opposed to plain-old “competition”—something Republicans are typically inclined to favor—is not entirely clear. …
In its current form, North Carolina’s bill would be the harshest of a handful of anti-Tesla regulations around the country. In Texas, the company is fighting a law under which the employees of its “showroom” in Austin are not allowed to sell any vehicles, offer test drives, or even tell customers how much the car costs. But at least Texas still lets people buy the car online, which North Carolina’s law would prohibit.
Tesla’s [Diarmuid] O’Connell rejects the idea that laws prohibiting automakers from selling their cars are designed to protect consumers, as trade groups like the North Carolina dealers’ association claim. He says the franchise-dealer model might work fine for giant automakers, but not for a startup like Tesla—especially since Tesla’s products represent a challenge to the traditional auto industry on which dealerships rely.
But it’s not Tesla per se, that worries the dealers. It’s the precedent. The prospect threatens the livelihood of North Carolina’s 7,000 licensed dealers, who invest millions in building big lots and showrooms to efficiently move product, say supporters of the bill. … The whole misunderstanding would go away, the dealers say, if Tesla sold its cars through licensed dealerships.
Mike Masnick huffs:
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.