If Tesla Motors CEO Elon Musk can't win against dealers at the state level, he will make a federal case of his bid to sell electric vehicles directly to the public through factory stores.
"If we're seeing nonstop battles at the state level, rather than fight 20 different state battles, I'd rather fight one federal battle," Musk told Automotive News last week.
Options include lobbying for federal legislation or a federal court lawsuit alleging restraint of interstate commerce, he said.
Auto dealers contend Tesla's factory-store model violates franchise and consumer laws in several states and urge Tesla to market its cars through a traditional franchised dealership network. But Musk said Tesla needs the freedom to sell directly to consumers if his fledgling car company is to survive.
The tussle came to a head last week in Texas, where Musk argued before a state House committee for an exemption to existing state law that permits new-vehicle sales only by franchised dealers. In addition to pitching its own bills in the Texas Legislature, Tesla also has backed bills in Massachusetts and Minnesota this year. Musk said Tesla may file bills in other states, too.
If Musk pursues a federal approach, one of two options is likely, he said:
1. Lobbying Congress to pass explicit legislation to allow direct sales of electric cars made by startup companies such as Tesla. Such legislation could be tied to an energy or transportation bill, he said.
2. Filing a federal lawsuit challenging the state restrictions as unconstitutional violations of interstate commerce.
David Westcott, chairman of the National Automobile Dealers Association, said it would be a "mistake" for Musk to launch a federal bid.
"NADA will vigorously defend the franchise system," said Westcott, a North Carolina dealer with GMC and Buick franchises. "A better option for Mr. Musk is to take advantage of the dealer network that already exists."