Elon Musk's New Plan For Dealerships Might Have Come From Another Customer Idea
For Tesla Inc (NASDAQ: TSLA), the public suggestion box isn’t just a formality or customer courtesy. CEO Elon Musk has a history of acting on tips, including a fifth-grader’s recent proposal for a fan-made commercial contest.
So it’s not so unreasonable for fans to expect Tesla’s next move to have origins in outside counsel. Citing a tip in a 2014 online forum, some speculate the company will soon employ creative methods to bypass state laws prohibiting direct-to-consumer auto sales.
The post’s title: “Why not locate Tesla retail stores/service centers on Native American reservations?”
“I think all of the states that are unfriendly toward Tesla have Native American reservations,” the post explained. “Could Tesla make a deal with some of the tribes and place Tesla stores and service centers on their land? Gaming has been a big success for many of the tribes, why not Tesla?”
Why Is This Necessary?
To protect consumers and franchised dealers, a number of states require automakers to work through third-party sellers — a model outside Tesla’s strategy. Between the company’s emphasis on customization, desire to limit prices and ensure that consumers truly understand electric vehicles, Musk justifies eliminating middlemen and seeing the auto process through from concept to sale.
While Tesla holds its ground, fans in Michigan, New Jersey, Texas and elsewhere must journey to nearby states to make a purchase. But if Tesla takes the tip and builds salerooms on reservations, where tribal sovereignty laws guarantee certain economic freedoms, the in-state showrooms may trash their state-mandated look-don’t-touch policies — and bolster Model 3 sales.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.