Electric vehicle manufacturer Tesla Motors has been banned from selling its cars in Texas, Arizona and New Jersey after dealers fought the manufacturer for cutting them out of the picture.
Dealer associations made the argument to US governers that by Tesla selling directly to customers; the brand was “threatening a free market”.
Tesla has rejected the traditional franchised dealer model in favour of controlling the entire sales process in a similar way to Apple stores. It currently sells its Model S EV at its Westfield Shopping Centre showroom in London directly to customers in the UK, priced from £49,900.
The majority of US state restricts or legally prohibits direct sales by car manufacturers and manufacturers are prevented from opening a dealership that would compete with existing independently owned showrooms.
Diarmuid O'Connell, Tesla's vice president of business development, said the company needs to sell directly in order to properly explain the benefits of electric vehicles to consumers, spending at least 2 hours with each customer before they buy.
O’Connell also said that prices are fixed at the Tesla owned showrooms, there are no negotiations to be had and no discounting.
Tesla's London showroom launch
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