Tesla Motors is selling electric vehicles, keeping its shares topside, helping charge an economy around the world, and looking for a state to break ground on for a factory. An agreement with Panasonic to invest in production equipment for lithium-ion battery cells for the new factory is fueling speculation as to where the factory will finally have a home. Things are looking up for the electric car manufacturing company. Southwestern states are pushing and shoving each other, clamoring for the first place in line as the state of choice to build the factory. Rumors are rife with Reno, Nevada, as being the site for the new plant. Concrete has already been poured there, but Elon Musk, co-owner of the company, announced other sites are still being considered.
The company plans to pour a construction plant pad in one other state, as it prefers to compare two sites, before making a final choice. One of the factors in the choice being made now, is securing agreements with whatever state is selected. The current situation in New Jersey is a case in point of dealership and franchise laws, confusing the issue. Tesla Motors does not have dealerships, as it sells directly to consumers from their own showrooms.
This may work for some kinds of products, however, cars are a different creature than most other commodities. Selling cars through a manufacturers showroom is an illegal distribution system, according the current laws of most states. Tesla Motors may not be able to sell many vehicles through a dealership, as there is no incentive for dealers to sell electric cars. It is a conflict of interest. A dealership with gasoline cars has no incentive to sell a vehicle that uses electric power, if the car is not manufactured by the same company. Charging an electric vehicle does not fuel a worldwide automobile economy based on gasoline.
The dealer argument favors franchise laws to protect their interests and that of consumers. Dealerships feel direct selling to consumers hurts their business, and also hurts consumers, as they have no recourse for repairs, complaints or the raising of car prices due to lack of competition in the electric car marketplace. According to Tesla Motors, the current market of cars is so vast and varied, this is a false argument; Competition between all manufacturers of vehicles is so strong, car prices and incentives are keeping the market keen and clean.
Within this framework, Tesla Motors, and the visible head of the company, Elon Musk, continue to push the boundaries other car companies are reluctant to explore. The situation in New jersey appears to be changing in favor of Tesla Motors. The New Jersey Senate will soon re-write the franchise laws and may make an exception for Tesla Motors, but also configure the law to protect dealers.
Meanwhile, back at the Tesla Motors factory, China is the new ground ripe for conquering. Supply issues is an immediate and serious main concern for Tesla in China. The demand for their electric Model S is strong and the company is currently pushing hard to meet goals set for its vehicles there. Musk responded to inquiries about service centers with an announcement to have at least 100 operational centers in China at the end of 2015. Tesla predicts 40 percent of its sales will probably come from Asia within a year or two. The economy concerning cars affects companies worldwide and Tesla Motors continues to charge forward, changing the standard for automobiles everywhere.
By Andy Towle