Wednesday, March 19, 2014

Embedded Interests 

Tesla is finding out the hard way about the embedded interests of auto dealers.  The electric car maker wants to sell autos directly to customers.  Dealers object, and they have the law on their side -- a law they largely wrote over the decades.  Tesla says it can work with its customers closely if it sells and services directly.  Dealers say Tesla could become a monopoly charging what it will, and customers won't be able to negotiate the best price.  So far, dealers are winning.  They contribute heavily to state campaigns, and they know legislators at the local level.  So, how does one change that?  Lobbying is essential but not enough.  Tesla needs a grass-roots approach that can override the influence dealers have.  So far, the auto company doesn't appear to have gone that far with its communications.  But, if it is shut out of the most populous states, its sales will be constricted, something a young company cannot afford.  Does the company make peace with dealers and market the traditional way or does it continue to fight.  Elon Musk is used to getting his way, but this might be a battle that even defeats him.


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