Entrepreneur

White House says it won't help Elon Musk battle state regulators

Electric car fogcat5 Flickr
Image Credit: fogcat5/Flickr

The American people demanded that President Obama help Tesla battle state regulators so that it could sell its electric cars directly to consumers. But the White House says it won’t get involved.

More than 138,000 people signed a petition on the White House’s official online petition platform, WeThePeople, to “allow Tesla Motors to sell directly to consumers in all 50 states.” Since the petitioners reached the (difficult) 100,000-signature threshold, the White House was required to give a response.

But the White House skirted the issue in its blog post yesterday: “Laws regulating auto sales are issues that have traditionally sat with lawmakers at the state level,” wrote Dan Utech, special assistant to the president for energy and climate change.

Throughout the country, including in Texas and Arizona, car dealers have managed to block car manufacturers from bypassing them as middlemen in the sale of cars to consumers.

In many states, Tesla is only allowed to operate “galleries” for its cars, where consumers can look but not buy. Tesla wants to run its own network of physical retail shops. Many Tesla supporters see this as an issue of government overreach, even if they don’t want to buy the cars themselves.

Utech did give a slight nod to Tesla, however. “We’re excited about the next generation of transportation choices, including the kind of electric vehicles that Tesla and others have developed,” he wrote. But it looks like this symbolic high-five is all the support Tesla can hope to get from the White House.

Tesla has struggled to gain traction for its direct sales model. It was able to sign a deal with New York Gov. Andrew Cuomo to keep five of its existing direct sales spots, but it can’t expand.

Elon Musk himself has come out swinging against high-profile politicians who support dealers over Tesla. Aiming at New Jersey, he wrote:

The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection.” If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of “protection,” this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.

Still, to be sure, Musk is doing fine. Tesla is at least doing well enough for him to contribute $1 million to a Nikola Tesla museum. I don’t think Utech will be invited to the opening.


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