FTC says Tesla doesn’t need dealer network in Michigan, stokes direct-to-consumer debate

Tesla’s direct-to-consumer sales structure is both innovative and intensely debated within the automotive industry. Several states have welcomed the new sales model and amended laws that favored complex franchise dealership networks, but others have fought Tesla at every turn.

Michigan is among the states that would prefer Tesla puts its sales model where the sun don’t shine, but now the Federal Trade Commission has delivered a blow to state bans on the direct-to-consumer concept.

GM backed an anti-Tesla law that was passed in 2014, but the FTC declared Tesla’s model is a benefit to consumers. By adding competitive pressure to the franchise dealership structure, Tesla’s model encourages a “survival of the fittest” mentality that has been absent.

The FTC isn’t known for passionate rants, but in its blog post, the governmental agency was brazen about the importance of allowing direct-to-consumer sales structures. “A fundamental principle of competition is that consumers—not regulation—should determine what they buy and how they buy it. Consumers may benefit from the ability to buy cars directly from manufacturers—whether they are shopping for luxury cars or economy vehicles. The same competition principles should apply in either case.”

This doesn’t just apply to Tesla; in other states, automakers have attempted to sell vehicles via their own branded dealers, but have been shot down by state regulations for bypassing the independent dealer franchise model. As you might expect, lobbyists for dealer franchises have been omnipresent each time a direct-to-consumer concept is vetted in state legislation.

Tesla Showroom

In addition to Tesla’s desire for its own sales model, Elio Motors and its 84-mpg three-wheeler have been fighting to sell without franchise dealer networks in Michigan. The FTC mentions Elio in its post as well, claiming its opposition to protectionism by dealer networks isn’t just for Tesla or Elio’s benefit, but for any brand who wishes to enter the market with a regulated product.

In summary, the FTC stated, “Absent some legitimate public purpose, consumers would be better served if the choice of distribution method were left to motor vehicle manufacturers and the consumers to whom they sell their products.”

I’m sold, but it’s going to take a lot more than a few blog posts to overturn such a deeply entrenched and well-funded franchise dealer system.

Product Review

The 2019 Porsche Macan S is a luxurious and quick SUV, but it's no road tripper

The roster of models challenging the Porsche Macan grows annually. The German firm updated its smallest, most affordable SUV with a new engine, more tech features, and subtle design tweaks to keep it looking fresh.
Deals

LG’s most affordable OLED TVs now come with $170 to $260 in gift cards

Trusted electronics retailer ABT is offering LG's most affordable OLED TV, the B8 series with $170 and $260 gift cards for the 55- and 65-inch models, respectively. While the OLED TVs don't often go on sale gift cards like this are…
Cars

Tesla could show the electric pickup Elon Musk is dying to build in 2019

Tesla has started designing its long-promised pickup truck. The yet-unnamed model will come with dual-motor all-wheel drive and lots of torque, plus it will be able to park itself.
Business

Chinese court upholds Qualcomm's complaint that Apple infringed on two patents

Apple is following the FTC's lead and has sued Qualcomm for a massive $1 billion in the U.S., $145 million in China, and also in the U.K., claiming the company charged onerous royalties for its patented tech.
Cars

2020 Toyota Supra caught hiding in a trailer without a shred of camouflage

Toyota's plan to once again lure enthusiasts into showrooms involves bringing back the Supra, one of its most emblematic nameplates. Here's what we know so far about the upcoming coupe, which Toyota is developing jointly with BMW.
Cars

NYC mandates minimum wage for Uber, Lyft, other app-based rideshare drivers

New York City's Taxi and Limousine Commission approved a rule that drivers for companies such as Uber and Lyft must be paid at least minimum wage, even though they are independent contractors. The new pay rate includes operating costs.
Cars

Driving a prototype 2020 Passat at Volkswagen’s Arizona Proving Ground

Volkswagen’s Arizona Proving Ground is where new cars are tested to the breaking point, including the 2020 Passat midsize sedan. Ride along as the new Passat completes testing ahead of its 2019 launch.
Cars

LM Industries’ autonomous shuttles head to Phoenix, Sacramento campuses

LM Industries will deploy Olli low-speed autonomous shuttles at school campuses in Arizona and California as part of its ongoing "fleet challenge," which asks local groups to propose uses for autonomous vehicles.
Cars

Bosch’s CES-bound shuttle concept takes us on a trip to a not-too-distant future

Bosch envisions a future in which driverless shuttles occupy their own market segment. The German firm won't build the shuttles, but it wants to provide everything else, ranging from the drive system to the apps used to hail them.
Emerging Tech

A lidar-equipped truck knows exactly how much de-icer to apply on roads

Lidar is best known as the laser-based technology that helps self-driving cars sense their surroundings. But the city of Knoxville has another, more seasonal use for it: De-icing roads.
Product Review

Boring takes a back seat as 2019 Corolla Hatchback mixes fun with practicality

We drive the 2019 Toyota Corolla Hatchback, the latest hatchback to bear the Corolla name. As the best-selling nameplate in automotive history, Toyota has high expectations to meet. This model mostly lives up to the legacy.
Cars

Hertz speeds up car rentals with biometric scan technology

Biometric security technology that uses face, fingerprint, and voice recognition is gaining traction, with Hertz emerging as the latest company to incorporate it into its daily operations.
Product Review

Inside Maserati's Levante SUV beats the heart of a Ferrari

Maserati’s luxury SUV gets a shot in the arm by way of Ferrari-derived V8 power, but is it enough to go toe-to-toe with the established players in the high performance sport-utility segment? Let’s find out.
Mobile

McLaren puts the pedal to the metal in special-edition OnePlus 6T

The OnePlus 6T is yet another flagship killer smartphone, bringing powerful specifications to a much lower price than the competition. Now, OnePlus has teamed up with McLaren for the OnePlus 6T McLaren Edition.