Michigan, along with many other states, have banned Tesla from selling their vehicles to customers through their "direct-selling" business model. They have no brick-and-mortar store front as many other dealerships do, which allows them to keep their prices cheaper than their competitors. Seeing this as a threat for business, many dealerships have put pressure on the local and state governments to ban or prohibit Tesla from selling in their state.
I think that reactions like this just show how other companies are afraid of something different than how they operate, and they also realize that not being "direct sellers" increase the cost of their products, which would naturally make them less competitive with Tesla and other "direct selling" companies. I don't think it is fair to outlaw Tesla. If other dealerships don't want to go out of business because of Tesla's innovative business model, then they should rethink their model and change what could hinder their competitiveness.
Link: http://www.theverge.com/2014/10/22/7038407/michigan-tesla-ban-signed-into-law
I completely agree with Rachael. In order to stay competitive, other companies need to innovate. I think it is unfair to punish Tesla for being innovative.
ReplyDeleteI dont believe Tesla is doing anything wrong in this case. Their business strategy is more successful right now than other companies'. I agree with both of you that punishing Tesla for this is wrong and other companies need to find a way to innovate or reduce costs to compete.
ReplyDeleteTo accept a structural shift from physical locations and dealerships to a car company which is directly selling to customers seems too big of a change for tesla's competitors. Although disruptions in business models get a lot of negative feedback initially due to the risk of losing business to the innovative competitor, we should be able to see more states accepting tesla's direct selling and making the car buying industry more efficient.
ReplyDeletePutting restrictions on Tesla is very anti-capitalist and hinders competition. Competition benefits consumers and businesses, as it helps balance supply and demand. Tesla is now not in the market in Michigan which can allow other car dealerships to have higher prices with reduced competition.
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