Do Massachusetts auto dealers realize how much free publicity they’re giving Tesla Motors? By pressing the Legislature to pass a new law that would squelch the electric carmaker’s store in Natick, the auto dealers are keeping Tesla in the news — and playing right into the company’s upstart branding strategy. Every Apple needs an IBM, and Massachusetts auto dealers seem hell-bent on providing a better establishment foil than Tesla ever could have dreamed of.
On the merits, there’s no justification for the legislation, except to protect incumbent dealers. The law would mandate that carmakers sell only through independent dealerships. That would effectively shut down Tesla’s Natick location, forcing the company to farm out sales to middlemen instead.
In most other industries, such a rule would seem absurd; lawmakers would never dream of going after Old Navy just because it sells its own label. But most states, including Massachusetts, have some form of restriction against direct auto sales, a testament to the political power of local dealers. Tesla, which suspects traditional dealers won’t push the company’s electric vehicles aggressively, has only managed to operate in Massachusetts at all by exploiting a loophole in the state’s law.
The dealers insist that the franchise system protects consumers. If so, they should have nothing to fear; buyers who prefer visiting traditional dealerships will have the option to continue patronizing them.
Tesla’s store does challenge the way cars have been sold for decades, and it’s no surprise that the middlemen are fighting back. But the Legislature should reject the proposal by state Senator Marc Pacheco, and instead embrace one from state Representative David Linsky that would explicitly allow Tesla’s store to operate.