No need for rush on Tesla sales model ban

Rebecca Lindland, an analyst for Kelley Blue Book, has some very good advice for Indiana lawmakers trying to decide whether to ban Tesla from selling its electric cars directly to consumers rather than going through a dealership: don’t be in a big hurry.

The auto industry is on the verge of a huge technological upheaval, and any legislative body establishing new regulations for auto sales could quickly find that they’re ill-conceived, she said.

“One of the tricky things about legislation is we are desperate to avoid unintended consequences,” she told The Indianapolis Star. “But it’s really hard to get a handle on unintended consequences when we’re in a time of such new territory. That’s why I feel like it’s so important to take things slowly, to evaluate them, to get a lot of different perspectives. We can’t have any knee-jerk reactions because that could be really damaging.”

The ban is being pushed by existing dealers, including GM. They say Tesla’s model hurts consumers because they can’t turn to dealers for help in the event of problems or mechanical failures. Dealerships also help people with the complicated financing of what is, for most people, the second-most expensive thing they will ever buy.

But enabling dealerships, points out a Washington Post editorial, is “a semi-feudal system of state-law trade barriers and bureaucracy whose ostensible purpose is to protect consumers but whose actual one is to protect incumbent holders of automobile retail franchises.”

One reason for the state to go slowly is that Tesla so far is no big threat to the status quo. It sells very expensive cars to a very well-off clientele. It has sold fewer than 800 cars to Indiana families, while the state’s dealerships last year sold a combined $16 billion worth of new vehicles.

But the company plans to start selling its more affordable Model 3 next year. GM is going to have a modest electric, too, for about the same price as Tesla’s: $30,000. If it truly wants to move into mass production, Tesla might decide it has to start working with dealerships.

But if it doesn’t want to, so what? Let everybody sell cars however they want to, and the customers will decide by their purchases which are doing it the right way. And maybe the legislature should decide ultimately to stay out of this particular fight.

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