FTC defends Tesla’s sale methods

Ever since Tesla first started manufacturing vehicles, they’ve been changing the game in the automotive world. Their innovations from an efficiency, environmental, safety, and design standpoint have been ground-breaking. Their business model has been unlike anything seen before. It was only fitting when – by no design of their own – a Model S was the first vehicle to be purchased with Bitcoins.

And that evolution and innovation also includes how cars are sold throughout the nation. Tesla has been under fire from states who are upset that the company employs a direct to consumer sales strategy, rather than the traditional model of independent dealerships.

Tesla’s straight to the consumer, largely online way of selling themselves has drawn such ire that they’re currently fighting legal action in Arizona, New Jersey, Texas, and Virginia. But Thursday the Federal Trade Commission stood by Tesla’s side, stating that there’s no single way that consumers should shop, and that Tesla’s model is simply a natural evolution of the automotive marketplace. In a long statement the FTC defended the consumer’s right to decide how to buy, and stated that,

“Dealers contend that it is important for regulators to prevent abuses of local dealers. This rationale appears unsupported, however, with respect to blanket prohibitions of direct sales by manufacturers. And, in any event, it has no relevance to companies like Tesla. It has never had any independent dealers and reportedly does not want them.”

The FTC’s strongest argument, however, was this:

“Our point has not been that new methods of sale are necessarily superior to the traditional methods – just that the determination should be made through the competitive process.”

The support of the FTC could go a long way towards Tesla’s methods becoming more widely accepted, and even practiced.


Photo Credit: Tesla Motors

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