New York's Legislature shouldn't tread on Tesla
New Yorkers wanting to buy one of those spiffy electric cars from Tesla would no longer be able to if a bill passed by the Assembly Codes Committee last week becomes law. That would be troubling, because the cars are highly rated, and the only reason legislators are considering the bill is that traditional auto dealers feel threatened by Tesla’s unorthodox way of selling cars.
The issue: Does it matter whether someone buys a car from a traditional, franchised dealer or directly from the company?
Tesla says no (and they point not only to their success selling cars directly to customers for the past 10 years, but to Apple Computer’s long-accepted sales practice in this country).
The traditional franchise holders say yes — that consumers are better able to negotiate price if they buy from a franchisee who faces competition from other franchisees; and that they have a better chance of getting their cars serviced after the sale through a network of franchised dealers.
But what business is it of the state’s to decide where consumers can and can’t buy their cars, and how best to get them serviced? The traditional dealers obviously have some turf to protect here, because if the Tesla direct-sales model were to become wildly successful, it could eventually render their sales model obsolete; just as electric cars may someday render gas-engine ones obsolete.
We think the concept of caveat emptor makes more sense: If consumers want to buy direct, if they prefer not to haggle with high-pressure salespeople, if they’re satisfied with a company’s service after the sale, then Tesla will succeed. If they aren’t, it won’t.
New York already regulates the way too many products are sold; cars should not be added to the list.