A bill that passed in the North Carolina Senate this week aims to prevent all car manufacturers from bypassing third-party dealers to sell their vehicles, a sales tactic Sentator Tom Apodaca referred to as “unfair competition”
The bill mostly targets Tesla Motors, whose business relies on selling cars directly to customers rather than through dealerships. It would also prevent manufacturers from selling their product independently online.
The bill is being encouraged by North Carolina Automobile Dealers Association, a group that contributed to Apodaca’s Senate campaign.
The company also faces legal barriers in Texas, where showroom employees are forbidden to sell any vehicles, offer test drives or tell customers how much a car costs.
Diarmuid O’Connell, Telsa’s vice president, said he believes the laws were not created with consumers in mind. Telsa’s progressive business model is a threat to larger franchise dealers.
“How do you sell the future if your business depends on the present?” He argued, saying small business will suffer under the North Carolina law.
Tesla made $11.2 million last quarter on its Model S, which ranges in price between $49,900 and $97,900 and received a rare perfect rating from Consumer Reports.
The Model S also outsold the Mercedes S-Class, BMW 7 Series and Audi A8 last quarter.