from Hacker News

What's stopping Elon Musk from becoming Tesla's largest franchisee?

by omfg on 3/29/14, 3:29 AM with 3 comments

I'm sure there's a simple answer to this but I haven't been able to find it. What's stopping Elon from opening up another company that happens to become Tesla's largest franchisee. Opening dealerships across the US and selling to consumers in states where laws forbid Tesla as a company from selling directly to the customer?

  • by dalke on 3/29/14, 3:45 AM

    dangrossman, in one of the other Tesla threads here on HN, answered a question of why Tesla can't just set up dealerships themselves. The rest of this post is a direct copy of dangrossman's response at https://news.ycombinator.com/item?id=7490837 - upvote that, not my ability to copy&paste:

    Because, under the same state laws, that's illegal as well.

    "It shall be unlawful for any franchisor to ... acquire any interest in any motor vehicle dealer in this state ... or to use any subsidiary corporation, affiliated corporation, captive finance source or any other controlled corporation, partnership, association or person to accomplish what would otherwise be unlawful conduct under this article"

    -- NY Vehicle and Traffic Laws, Article 17A, Franchised Motor Vehicle Dealer Act, S 463 Unfair Business Practices by Franchisors

    There'd be little point to having the rest of the law on the books if it were so easy to work around.

    Note that "franchisor" as defined in that law includes all manufacturers, whether they sell franchises or not. IANAL.

  • by jesusmichael on 3/29/14, 3:38 AM

    because Tesla is a battery company... which is far more lucrative than building an electric car only rich people can drive..