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March 2, 2015 Other Voices

Tesla: Direct-consumer sales give car buyers more choice

Ricardo Reyes
PHOTO | Contributed Tesla, whose electric vehicle is shown above, is pushing the state legislature to allow it to sell directly to consumers.

Innovation in consumer technology has allowed a gamut of consumer options — think customized computers from Dell and Gateway, Apple and Android smart phones, and online shopping options including Amazon, Ebay, and Craigslist. Unfortunately, consumer choice has not extended to automobile sales. A decades-old Connecticut law forces consumers to buy cars exclusively through a dealer network.

Imagine if consumer choice applied to cars. You could choose whatever features you wanted in a car (or didn't want), you would know the price of a car without haggling or waiting for “manager approval.”

In some states, there is such a choice. Tesla sells all of its vehicles to consumers directly, allowing those customers to decide the features they want in an innovative, award-winning, zero-emissions vehicle; a vehicle that uses no gas or oil, but only domestically produced electricity; a vehicle that is built entirely in the United States.

We've seen the consumer-first system work well, recently showcased by Consumer Reports bestowing on the Tesla Model-S their highest-ever customer satisfaction rating, and 98 out of 100 customers saying they would definitely purchase a Tesla again.

Since our inception, Tesla has created over 10,000 jobs, and supported numerous U.S. automotive suppliers located throughout the country. With choice, consumers have the ability to be the ones behind the wheel.

Most people today would rather go to the dentist than suffer through the traditional process of purchasing a new car. Yet the Auto Dealers Retail Association in Connecticut recently expressed that Tesla should consider changing their current business model from direct-consumer sales, so that a middle party can sell Tesla electric vehicles.

Independent economists who have looked at the issue, along with the Federal Trade Commission and Department of Justice, have concluded that consumers are better off, and in fact, will pay lower prices if they are able to buy directly.

At the beginning of the 20th century, Henry Ford wrote that any customer could have a car painted any color so long as it is black. Today the Auto Dealers Retail Association would have consumers buy any care they want, as long as it is from one of their dealers.

The solution is simple — let consumers decide for themselves.

Rather than trying to force a specific business model on an entire industry, let the principles of free market and consumer choice dictate which businesses thrive and which do not.

This is not the same as giving up consumer protection (as the Connecticut Auto Retailers Association would have you believe). Regulatory protections on safety, emissions, warranty, lemon laws would all still apply — but would now apply equally across the board.

Connecticut residents and consumers would then be able to decide for themselves how and from whom they would buy their car. 

Ricardo Reyes is the vice president of global communications at Tesla Motors.

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