Tesla defends selling cars directly to the customer at FTC panel

Collins Oldsmobile, Indianapolis IN, 1971 (credit: Alden Jewell)

On Tuesday, the Federal Trade Commission (FTC) assembled a panel of experts in auto manufacturing and marketing to talk about whether or not automakers should be allowed to sell cars directly to customers.

Representatives from Tesla Motors, as well as Elio Motors, a company that has plans to manufacture cheap, three-seater vehicles, argued that new car companies shouldn’t have to comply with a dealership model of car distribution—something that been a contentious issue for Tesla in previous years. Tesla has been barred from selling directly to consumers in numerous states including New Jersey, West Virginia, and Texas. The FTC, however, has sided with Tesla, calling for legislation to revisit regulations on how cars are sold. (FTC officials stressed at today’s panel that the commission was not going to assert its opinion, but instead leave the stage to the speakers it had assembled.)

On the opposing side, auto industry analyst Maryann Keller and dealership attorney Paul Norman argued that the dealership model is good for consumers because it promotes “intrabrand competition”—or the idea that competition doesn’t just happen between, say, Ford and Volkswagen, but between Ford dealers within the same city.

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