Tesla Strikes Deal To Keep Dealerships In New York

Just goes to show you - it&#x27;s sometimes better to ask for forgiveness than permission.<p>Imagine if Tesla hadn&#x27;t opened stores in these locations - they would be indefinitely, unconditionally barred from doing so unless they had flouted the auto dealer rules and went forward with the stores regardless. Now they have a foothold. When you realize that the stakeholders (in this case, New York State Politicians) have a political interest in you flouting their rules then the rules just don&#x27;t seem that rul-y anymore.<p>It&#x27;s also what&#x27;s going to get their foot in Texas, as well.<p>Elon Musk is one smart dude.

How is requiring a car dealer to sell through a dealership beneficial to anyone besides the dealership lobby which spent millions of dollars in getting that law in place? This is why I freely support any company attempting to disrupt any industry that uses the US gov&#x27;t to create laws limiting direct competition (Healthcare for example).<p>Politicians who stand up for this kind of nonsense should be ashamed.

Certainly no one should expect this status quo to last for long. The dealers will keep lobbying to kick Tesla out, and Tesla will keep lobbying to lift this restriction.<p>In that light, this is an interesting long-term strategic move on Musk&#x27;s part. It arms him with a &quot;we&#x27;ve been selling in this state for X years with Y thousand satisfied customers, so how can this be so problematic that it needs restriction?&quot; argument for his lobbying efforts a few years down the line.

Wow so this seems actually worse than outlawing Tesla because what they are doing is giving Tesla major privileges over any future competition. Seems very monopolistic.

Can someone with more knowledge of the (outdated) franchise law explain why Tesla can&#x27;t&#x2F;hasn&#x27;t created their own dealerships (that officially aren&#x27;t Tesla owned), but sell only Teslas?

These laws are crazy. They work for Tesla currently, but what about the future and future direct-to-customer sales models by other companies?<p>When Tesla grows, they will need more than 5 dealerships in order to reach more of the population.<p>When a new competitor tries to sell direct, these rules will make it impossible for them to compete on an even playing field with Tesla and therefore have to revert to the old dealership model. Win for Tesla, loss for free markets and competition.

This is a great compromise for Tesla. The dealerships don&#x27;t fear Tesla, they fear their manufacturers will start selling directly over the internet and cut them out of the loop. This should pacify their fears but still allow Tesla to operate. Long term, I suspect, this will be overturned, but for now it&#x27;s a great compromise.

As a bemused European looking at this situation. Did a new U.S. manufacturer, just agree to sell cars in mob town?