New York Could Be Next to Ban Tesla’s (TSLA) Direct Sales Model

The Empire State residents may soon have to go out-of-state if they want to purchase a Tesla (TSLA) vehicle.

Mark Scheinberg, the president of the Greater New York Automobile Dealers Association told the New York Post last week that he feels ‘confident’ the State of New York can follow New Jersey in blocking Tesla’s business model, which prevents consumers from buying vehicles directly from the California-based automaker.

Last Tuesday, the New Jersey Motor Vehicle Commission voted to block Tesla’s sales model, drawing fierce criticism from Tesla’s numerous fans. Tesla founder Elon Musk also reacted to the decision, accusing New Jersey Governor Chris Christie of “subverting democratic process to try to block Tesla sales.” Musk vowed to pursue legal remedies to fight the ban.

That apparently hasn’t stopped the car dealership lobbyists from continuing their attempts to ban Tesla. According to Capital NY, representatives of New York state’s dealership lobby met with Gov. Andrew Cuomo last year to pitch a direct sales ban. If the ban happens, New York will become the sixth state to ban direct sales from Tesla Motors.

Doug Wells, owner of the Mercedes-Benz of Brooklyn dealership, told CNBC on Monday that the dealership model works better for consumers than Tesla’s direct-sales method.

“The dealer model works for consumers,” Wells said on “Squawk on the Street.” “One, it gives them a place to service their car. If they’re traveling and their car breaks down they can go to another local dealer that’s the same franchise.”

While we respect Wells’ opinion, we couldn’t disagree more with it. The realıty is dealers have created an effective monopoly on car sales and Tesla is a clear threat to that monopoly.

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