New York Dealers May Help Pass a Ban on the Sale of Teslas

| by Sarah Siskind
article imagearticle image

The New York state legislature is considering a bill that would prohibit the registration of any vehicle sold without an independent third party or car dealer.

Currently the state assembly is in the process of passing the bill. As Tesla CEO, Elon Musk tweets, “NY Assembly passing bill to shut down Tesla, but Senate holding the line. Appreciate senators resisting influence of auto dealer lobby."

The auto dealer lobby has been quietly pushing Assembly bill A07844 and State bill S05725, which would prohibit companies like Tesla from selling their car products directly to the consumer. The fight between the dealers’ lobby and Tesla began in 2012 when the lobby filed suit against Tesla under the Franchised Moto Vehicle Dealer Act, which allows state oversight in the sale of cars. The lobby lost the suit when the state Supreme Court ruled that Tesla was merely a competitor being strong-armed out of the market.

Since then, the fight has ensued with the lobby acting more like an oligopoly. The lobby has national support from other dealers concerned with the effectiveness of Tesla’s new sales strategy.  The Alliance of Automotive Manufacturers and the Global Alliance of Manufacturers both claim to support the legislation in New York.

Dealers in both Massachusetts and Texas are also challenging Tesla. It is clear from the energy, time and resources expended in fighting Tesla just how revolutionary and threatening dealers find this new business model.

Meanwhile stock prices are up 500 percent since June 2010 and are trading at an astronomical $99.5 a share. The car itself rates at 99 out of 100 in the Consumer Ratings Report.

CEO Elon Musk sums up, “I'm having a lot more fun these days."

Sources: Auto Blog Green, Mercury News