FTC Officials Back Tesla’s Right To Sell Cars Direct To Consumers

Key officials at the FTC aren’t mincing words in a new post defending the right of manufacturers to sell directly to consumers: Part of the U.S. regulatory trade organization’s executive team detailed its wider position following the publication of a letter of comment specific to new legislation in Michigan that would ease that state’s blanket ban on manufacturer-direct sales, but only for a unique new category of vehicle dubbed “autocycles.” Tesla has long borne the brunt of these kinds of state laws, which were ostensibly first put in place to protect consumers, but which now serve largely to protect third-party dealer interests.
Tesla has been fighting an uphill battle against these outdated regulations, most visibly in New Jersey, where Governor Chris Christie first forebode direct sales, bowing to powerful dealer local interests, then had to go back on that move following a decision by the New Jersey Assembly Consumer Affairs Committee, which resulted in a new law just passed in March being passed that allowed it to return to selling the vehicles.
Michigan is shaping up to be the next battleground, through this new bill, which is actually aimed at letting specialty covered tricycle company Elio sell its products direct, though others including Texas and West Virginia are still keeping the direct sales ban burning. Throughout this process, the FTC has let it be known that at the federal level, sentiment is on the side of Tesla, but this new declaration of support may be the most clear-cut, far-reaching and definitive yet.

This is not a change in law – the FTC is leaving final determination in these cases in the hands of local state regulators. But this continued outspoken support from these high-ranking office members (they posted on the issue last year, too) is a sign that holdout states could face more serious challenges later on, if they continue to endorse these kinds of bans that block Tesla’s direct sales model.