After dealer associations in two U.S. states filed a lawsuit against Tesla Motors, CEO Elon Musk brought up three key points to defend the company’s decision to bypass the traditional dealer system.

He first pointed at a conflict of interest where dealers sell both electric cars and conventional, combustion-engined cars. By showing potential buyers the attractive benefits of the former, they undermine the value of the latter.

Musk also reiterated the claim that Tesla’s factory stores merely serve as showrooms. People who want to make a purchase still have to go to the website. They can take delivery of their car either at the assembly plant, in one of Tesla’s service centres, or directly at home — never at one of the supposedly illegal stores.

Finally, Musk explained that those service centres don’t sell vehicles but only take care of delivery, maintenance, and repair. As such, they don’t get an unfair advantage nor violate state franchise laws, he said.

Let’s wait and see how the U.S. court interprets Tesla’s business model.


Tesla Motors
Photo: Sébastien D’Amour