The state of Connecticut is a rich and progressive state, having a strong track record of support for laws and policies that center around reducing global warming emissions and a goal of incorporating more than 150,000 electric vehicles (EV) on the road by the year 2025. Given the policy commitments of the state, people would most likely assume that Connecticut would be a place that would welcome an innovative and important business company like Tesla, the largest electric vehicles manufacturer in the U.S.
Why Is Tesla Prohibited To Operate In Several States
But unfortunately, Tesla is actually legally prohibited from operating its Tesla stores in Connecticut. According to Eco Watch, under Connecticut's dealer franchise law, and under the law of several other states throughout the country, automobiles may only be purchased legally through independent car dealerships. Tesla's cars are sold directly from the manufacturer itself, which mean that Tesla stores are not welcome in Connecticut and other states that have this policy.
Tesla Being Hit With Dealer Franchise Laws
The issues that Tesla has faced with automotive dealers and state dealer franchise laws have presented a combination of unintended consequences, some special interest influence and the obstacles of having to develop new technologies in marketplaces that are dominated by entrenched interests and outdated laws.
Why Do We Have Dealer Franchise Laws?
According to Yahoo! Finance, the car dealership model rose in the 1920s and 1930s, as first implemented for General Motors and then eventually all of the other American automakers who chose to license the rights to sell their cars to independent dealers, rather than selling the cars directly towards consumers.
The independent dealership laws worked since it has allowed both parties to focus on some core competencies: The manufacturers could focus on making the best cars, while independent dealers made the inroads into communities that allowed them to sell the cars directly to consumers. This law has been the main reason why we aren't seeing Tesla in several U.S. states.
