As if selling $70,000 electric cars is not a hard enough task, Tesla Motors is now facing a tough fight just to keep its stores open in New York.
After receiving a drubbing in New Jersey earlier this month, Tesla finds itself on the defensive across the Hudson, as a N.Y. car dealer trade association brashly claimed that the start-up car maker would find itself banned from the state by this summer.
"My hope is that we are going to be the next state," Mark Scheinberg, president of the Greater New York Automobile Dealers Association (GNYADA), said. "I feel confident."
Tesla had no comment on the situation in N.Y. or on Scheinberg's statement when contacted by Tech Times.
Tesla currently operates five stores in N.Y. in Roosevelt Field, Syosset, Mt. Kisco, N.Y. City and White Plains, along with four service centers. Unlike traditional car dealerships that hold dozens of models at a variety of price points, Tesla tends to place its locations in shopping malls where they are more akin to an Apple Store that a Honda showroom. In fact, the stores were designed by the same fellow that put together Apple's look.
Tesla believes this selling environment is necessary because of the type of cars it sells, very expensive battery powered vehicles that require a great deal of consumer education by its staffers, as opposed to a direct sales pitch normally found at a traditional car dealer.
And this approach is at the heart of Tesla's problem. Car dealerships do not like the idea of a manufacturer-controlled store as it cuts the middleman, aka dealership, out of the loop.
So in N.J., N.Y. and several other states, dealership groups are lobbying their state governments to stop Tesla. They believe the situation created by Tesla will hurt consumers as it limits their choice of where to purchase a vehicle.
The New York State Automobile Dealers Association and the GNYADA lost a court battle in 2013, but the GNYADA is appealing this ruling.
Dealers were more successful earlier this month when New Jersey Coalition of Automotive Retailers convinced the state to endorse a proposal that would ban Tesla's business model and require all cars be sold through a middleman. Tesla operates two stores in N.J.
"Unfortunately, Monday we received news that Governor Christie's administration has gone back on its word to delay a proposed anti-Tesla regulation so that the matter could be handled through a fair process in the Legislature," Tesla CEO Elon Musk said via his blog.
Musk is no stranger to taking on challenges. He is also the founder of Space X, which is creating a fleet of privately operated spacecraft.
