To the Editor:
Regarding "Musk opens fire on Texas dealers" (April 8) about Elon Musk and Tesla: I find his strategy bizarre.
I won't bother addressing the anticompetitive aspects of it.
Texas legislators have a good understanding that they were elected by Texas residents who run and work for Texas businesses -- none of which applies to Musk.
Tesla, for unknowable reasons considered revolutionary (the electric vehicle was not invented by Elon Musk), appears to believe it deserves special automaker status because it builds electric vehicles or doesn't have any sales points in Texas, or both.
It is difficult to comprehend why Musk considers direct sales such an integral part of the Tesla strategy that he is risking the company over it. Indeed, the franchise system has been developed and refined over many decades. The history of automaker-managed dealerships is one of dramatic failure.
Dealership management is complex. To operate one store profitably, you need to hire bookkeepers, technicians, salespeople and parts clerks. Further, a dealership requires an enormous capital outlay, which automakers have historically found is better used designing and building cars.
Car dealerships are hardly Apple stores, which require one employee skill set and one manager and can be put in any leased space.
Finally, I would guess that Tesla would already have 15 or 20 showrooms open in Texas if only Musk embraced the inevitable.
That would appear to be a better result for Tesla shareholders in the short run; and, as long as the manufacturer is allowed to set invoice prices, it is hard to imagine how it wouldn't lead to a better result in the long run.