White House won’t help Tesla sell cars online

White House won’t help Tesla sell cars online
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The White House says there is nothing it can do to help electric car company Tesla Motors sell cars directly to consumers.

In response to a White House petition calling for the government to preempt state laws requiring shoppers go through auto dealerships to pick up one of the vehicles, advisor Dan Utech indicated the Obama administration would stay on the sidelines.

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“We believe in the goal of improving consumer choice for American families, including more vehicles that provide savings at the pump for consumers,” Utech, President Obama’s assistant for energy and climate change, wrote. “However, we understand that pre-empting current state laws on direct-to-consumer auto sales would require an act of Congress.” 

He went on to highlight the efforts the administration has taken to improve fuel efficiency and “spur more consumer choice,” but does not call on Congress to get involved to help out the upstart electric car firm.

“As these initiatives show, the Administration is in favor of fostering competition in the market to help spur the kinds of innovation needed to support ongoing U.S. leadership in vehicle manufacturing and a potential range of new technologies,” Utech wrote.

The Palo Alto-based company founded by billionaire Elon Musk has faced off against state legislatures that have blocked it from selling cars online, directly to consumers. Auto dealers say that Tesla’s online sales violate a decades-long tradition of requiring cars are sold through their franchises, which prevent manufacturers from undercutting their prices and forcing them out of the market.

Tesla and its supporters have struck back.

“States should not be allowed to prevent Tesla Motors from selling cars directly to customers,” critics wrote in the White House petition, which was created last June but only received a response on Friday.  

“The state legislators are trying to unfairly protect automobile dealers in their states from competition," they added. "Tesla is providing competition, which is good for consumers.”

A Tesla executive was disappointed by the response on Monday.

“Instead of showing the sort of leadership exhibited by senior officials at the Federal Trade Commission who declared their support for consumer freedom of choice, the White House merely passed the buck to Congress and trumpeted its advances in promoting vehicle efficiency,” vice president of corporate and business development Diarmuid O’Connell said in a statement.

“Given the economic and environmental principles at stake, we would have hoped for stronger leadership and more action.”

 

- Updated with comment from Tesla at 6:40 p.m.