Tesla Motors Inc (NASDAQ:TSLA) the electric car manufacturer does not use dealers to get to its customers. Instead, it sells directly to them. However, there is a looming speculation that this is likely to stop within the next three years if a proposed legislation, which was discussed for hours on end by a House committee, goes through. Attempts to limit Tesla’s ability to sell directly to customers began last year but they were unsuccessful. Nonetheless, is compromised, the newly proposed House Bill 1592 would somewhat open a new chapter for Tesla
According to many supporters of the bill, which was authored by House transportation committee Chairman Ed Solidary, consumers ought to be protected from exploitation. Nonetheless, there are those who feel that the same bill is an attempt to suffocate an innovative company but Solidary maintains that the current market is a disorder from technology changes.
But the bill would institute a policy change
Every operation must be guided by policies. Thus if the bill becomes effective through a vote on an amendment then changes must be effected. This raises questions in a pro-business state, which is controlled by Republicans.
Nonetheless, Solidary outlines, “We are a very pro-business state, but at the same time (we need to) maintain loyalty to those people who have provided jobs, invested billions of dollars in our state and have serviced the consumers of Indiana for many, many years,”
Manufacturers are the only people advocating for these changes: Who is fooling who?
Tesla has an unconventional business model, which is more of a competitive advantage over traditional automakers. Apparently, only manufacturers are so much into these changes according to Mitch Rolsky. The Indianapolis realtor and Tesla enthusiast say that they are just trying to fight Tesla’s direct distribution approach.
In response, Tom Kelly of the Kelly Automotive Group indicates that the issue is not about Tesla but the protection of consumers. The committee is now waiting to meet again to vote for or against the bill. In the meantime, Tesla’s stock closed at $249.24 a decline of $2.69 or 1.07%