Tesla aims to be the only automaker to sell cars without middlemen
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Tesla aims to be the only automaker to sell cars without middlemen

Tesla’s plan to move its sales fully online will mark a major step for the U.S. auto industry. Traditional automakers are still required by the U.S. law to go through a middleman to sell their cars. Tesla announced last week that it will reduce headcount in sales as it plans to host online stores for selling its cars.

According to a CNBC report, Adam Jones, Morgan Stanley analyst, “From our discussions with [traditional automakers] over many years, most auto companies would love to sell vehicles the way Tesla does. There’s just one catch. They can’t. It’s against the law.”

It’s just so easy to buy a Tesla

“Tesla is the only [original equipment manufacturer] to our knowledge that is allowed to sell its wares through company-owned stores. Tesla is now trying to take this a major step further to be the only [automaker] to sell new cars directly to consumers online without the involvement of a physical dealer,” Jonas added.

There might be some resistance from rivals as they might unfurl regulatory tactics against Tesla. However, Jonas is of the opinion that since the electric carmaker is already selling cars without middlemen their move to shift the sales of Tesla cars online will also be protected. This might be a time when automobile companies rethink the existing regulations that bind the industry.

“Then investors should look for a revival of the debate around auto dealer franchise laws,” Jonas said. He mentioned retail banking as an example mentioning that online banking services come at a cheaper price and also makes life easier for customers.

Jonas thinks that Tesla’s plan of shifting its business to an online platform might work. “It’s 3 clicks. That’s about as many clicks as it takes to buy catnip on Amazon,” Jonas said.

Image via Shutterstock

Tesla aims to be the only automaker to sell cars without middlemen
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