Automotive Blog

High Tension


Tesla are busy rolling out their network of ‘Superchargers’, the public charging stations to support their growing range of electric vehicles.  Striking in design and extremely powerful, the points can deliver about 3 hours of driving time, or around 180 miles worth of charge to a Model S, in just 20 minutes.

The company recently announced the opening of their 100th Supercharger worldwide, and the irony won’t have been lost on anybody who has followed the fortunes of the company, and in particular its attempts to establish a directly-owned distribution network across the USA.  The ribbon-cutting took place in Hamilton, New Jersey, the very State which only the previous month had hurriedly passed a ban on Tesla operating its direct sales model there.  In a last-minute change of heart which has prompted widespread accusations of corruption and abuse of power, Governor Chris Christie seemingly bypassed the State Legislature, and allowed the New Jersey Motor Vehicle Commission, a body comprised of his own appointees, to rule on the matter instead.  The company, which had been selling in the Garden State, one of the USA’s strongest luxury car markets, for almost a year, has been forced to shut up shop.

Tesla’s directly-owned channel model has been incurring the wrath of dealers in the USA since it was announced, with many arguing that it breaches the strong State-based franchise laws which protect dealers from manufacturer abuses of power by enshrining their right to sell new cars.  The dealer lobby is both highly vociferous and economically extremely important, but has thus far only succeeded in halting Tesla’s plans in 3 States, Texas, Arizona, and now New Jersey, even though its progress has been substantially slowed in many more.

But in the same week as Tesla owners starting hooking up to free electricity in Hamilton, the company gained a powerful ally for its direct sales model, and from an unexpected source – the US Federal Trade Commission.  In a blog post on the FTC web site entitled ‘Who decides how consumers should shop?’ 3 Directors of the organisation lay into State laws which they believe instead of ‘protecting’ dealers have become ‘protectionist, perpetuating one way of selling cars – the independent dealer’, and accuse those who seek to use them to enact direct sales bans of ‘bad policy’ that is anomalous in the broader economy.  They end on the hope that ‘lawmakers will recognize efforts by auto dealers and others to bar new sources of competition for what they are – expressions of a lack of confidence in the competitive process that can only make consumers worse off’.

Blog posts are personal views rather than policy, and the disclaimer on the FTC web site says as much, but strong support from 3 Directors of the Federal regulator has to be seen as a big win for Tesla in its Stateside battle for hearts and minds.  The company claims that, when its charging network is complete, US drivers will never be more than 100 miles from a Supercharger.  How far will they be from a company-operated store?



Written by Andrew Tongue

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