Entrepreneur

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

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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20 comments
Scott Hughes
Scott Hughes

If Tesla was a Chevy and the Model S was a Volt it might be different and the white house might step in. Suggestion for Elon go form an industrial FDIC institution.. Your companies have the capital to do it! Feel free to contact me for further information and assistance.

Steven Barth
Steven Barth

Clearly Musk is being punished for not being a big enough donor to Obama, the DNC or MoveOn.org because that's the way our non corrupt democracy works. I wonder how it would be treated if Warren Buffett owned Tesla?

Eric Parker
Eric Parker

Of course not, the fucking auto industry is in the politicians' pockets

Cody Young
Cody Young

The Federal Government only has twenty enumerated Constitution powers which supersede state legislation. This is how it should be. This means sometimes a state will decide weed is legal, sometimes it will decide you can't compete with dealerships. Either way, its not a Federal issue and everyone should be glad that this is how our system was designed. I like Tesla Motors, I am a big fan of Elon Musk, but he is going to have to fight state by state and I am confident he will be able to do so.

J. Matthew Riva
J. Matthew Riva

That's because the White House is owned by corporate America duh.

Jon Niola
Jon Niola

If Elon wants government to cut regulations he should make Tesla into a bank.

Nikolaus Heger
Nikolaus Heger

It's a simple matter of where the money came from. No way Tesla can compete with entrenched interests as far as lobbying power aka the power to buy politicians is concerned.

Neal Bottari
Neal Bottari

It's actually very American although I wish it isn't what's happening. This is what happens when a country gets furious over the government helping businesses.

Manish Patel
Manish Patel

If you all recall the auto bailout hearings included huge representation from the auto dealers. Both parties bought and paid for with video documentation. Shame on BO if this is true.

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madurai kk

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John Quest
John Quest

Funny, the white house had no problem forcing healthcare down our throats when it was traditionally done at a state level.  All the requirements are to buy from private companies.  Way to pick and choose White House.