In what could be a monumental statement for electric car automaker Tesla, the FTC has slammed state bans on direct sales by the manufacturer. The statements from the Federal Trade Commission (FTC) could pave the way for the California car company to make inroads into markets across the country where direct sales had been barred, notably New Jersey.
Top FTC officials have thrown their support behind Tesla, which has developed top of the line, luxury, electronic cars that can travel at much greater distances than others on the market. The catch for the company, which is struggling to turn a profit, is that they only sell the vehicles directly to consumers, meaning the middle-man, or the car dealerships, are out of the picture.
In many states, especially in New Jersey where the direct sale by Tesla was banned, it has become increasingly difficult for Tesla to enter the market based on their current model. And the company has refused to change its ways.
In a blog post published on the FTC's website, three officials lashed out at states that have put up barricades for direct sales of cars, referring to this as "bad policy."
The post, authored by Director of the Office of Policy Planning Andy Gavil, Director of the Bureau of Competition Debbie Feinstein and Director of the Bureau of Economics Marty Gaynor, however does not offer an official FTC policy on direct sales and the agency has yet to make a ruling on the topic.
The post says that direct selling "may be essential to allow consumers access to new ways of shopping that have become available in many other industries."
Tesla sold more than 20,000 vehicles in 2013 and as the company continues to attempt to transform car manufacturing and electric car possible, it is also changed how consumers are able to purchase a vehicle directly from the automaker.
"Efforts to litigate, legislate, and regulate to eliminate Tesla's perceived threat have forced it to battle jurisdiction-by-jurisdiction for the simple right to sell its automobiles directly to consumers," the post writes.
Many believe that as the way people purchase items and products online, so should the market shift to enable users and consumers the ability to determine their own purchasing power and by direct sales, Tesla believes it can give consumers a better price than those marked up by dealerships.
However, a number of reports pointed out that many of the dealerships are family-owned and if companies go the direct sale path, it could put people out of jobs.
Although Tesla did not respond directly to the blog post, it said it was pleased by what it read.
