The New York State Assembly has tabled a set of two proposed bills that would render Tesla Motors’ business model for selling cars illegal in the state.
Tesla’s sales model takes a page out of Apple’s playbook, selling its electric cars through its own branded stores, rather than through third-party dealerships.
The bills, which were proposed last week and supported by auto dealers in New York state, would “require that cars can only be sold and registered when sold by a third party, which would be a dealer or a private seller” and ban car companies from seling their wares direct to consumer, Jalopnik reported last week. The measures would be a direct hit to take down Tesla, as it is the only car maker operating in New York with a direct sales business model.
Tesla founder and CEO Elon Musk rallied against the proposed bills on Twitter late last week:
https://twitter.com/elonmusk/status/348112948230774784
https://twitter.com/elonmusk/status/348115440440066049
Musk can rest easy for the time being, however, since the bills have been shelved. The state assembly’s lower chamber “adjourned its legislative session late Friday without acting on the measure,” AutoNews reports. This means that Tesla is clear to function as is at least through the duration of 2013, as the New York State Assembly is not scheduled to reconvene until January.
Musk credited the bill’s stalling in the Senate to public protest:
https://twitter.com/elonmusk/status/348843230365876225
It’s good news that the bills have been set aside, but it just goes to show the lengths that entrenched industries will go to fight back against disruption from the new generation of technology-first companies. Tesla’s fight against auto dealers is probably not over yet.