US Federal Trade Commission directors support Tesla’s direct sales practice image

According to senior officials of the US Federal Trade Commission, the states that are considering to bar Tesla Motors direct sales practice should consider first the consumer interest, not auto dealers needs.

The electric car maker from California, which has been in the past year America’s sweetheart when it comes to investor interest – with it stock gaining around six times in value – has recently seen an escalating fight when it comes to sales.

Its direct sales practice – which means it owns the showrooms for its cars, has seen Tesla combat state by state for the right to sell without direct involvement from dealers. In a blog post, the agency’s directors said state officials should take into account that banning Tesla could harm the existing industries and sales models. The US FTC has among its nationwide responsibilities to ensure customer protection and promote healthy business competition.

“Consumers can benefit from change,” the FTC officials said. “Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated.”

“We didn’t get into this debate by choice, and we didn’t pursue the direct-sales model to disrupt traditional dealer practices,” adds Diarmuid O’Connell, Tesla’s vice president of business development. “Statutes that may have been created to protect consumers many years ago have been implemented mainly to protect the dealer body in many states.”

The three agency directors, Andy Gavil of the policy planning office, Debbie Feinstein of the bureau of competition and Marty Gaynor of the economics bureau said they simply expressed their own opinion – and it’s not coming from the commission or the voting members.

Via Bloomberg