General Motors sent a letter in Indiana to ban Tesla Motors from selling direct to customers. Tesla has sold vehicles to customers through direct vehicle sales, and it says if the letter is signed into law it would revoke Tesla’s permission to sell vehicles from its existing storefront in Indianapolis.
The state of Indiana is seriously considering locking Tesla out of the state — with a real possibility that Tesla will be prohibited from holding a dealer license in the state after 2017 ends.
"Despite having a lawfully granted license to sell Tesla vehicles directly since 2014 at the Fashion Mall at Keystone; despite contributing over $42 million to the state through the purchase of parts and components from Indiana suppliers; and despite plans underway to construct a 26,000 square foot Tesla Service facility that will employ approximately a dozen Indiana residents and serve our customers, GM is pushing the Senate Committee to shut out Tesla," the company wrote in a plea to owners and enthusiasts who reside in Indiana.
The curious thing about this is that the rules protecting dealers were developed to as a defence against General Motors and Ford in the first place; as James Surowiecki wrote in the New Yorker, dealers were afraid of losing their turf or being dropped.
Dealers recognized that much about their businesses was always going to be out of their control—automakers not only decide what cars get made but also dictate sales strategies and incentive plans. So they decided to protect what they could, using laws to insulate themselves from competition and from the risk of being dropped by the manufacturer.
GM supports HB 1254. GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products.
A benefit of a nationwide network of thousands of dealerships is that General Motors customers never have to worry about driving to another state to buy, service or support their vehicles.
Tesla's insistence on special rules could result in multiple manufacturers competing with similarly capable vehicles and similar price points, yet operating under a different set of rules.
Tesla could open a franchised dealership with an independent operator in Indiana today, but instead they insist that the State must first provide them with unique rules and special exceptions to suit their own business interests. In fact, Tesla was willing to agree to a dealer model in Virginia. The Indiana legislature shouldn't create a special exemption for them here.
