Speed Bumps

Elon Musk was first recognized by his debut of electronic banking organization Paypal. Now, Musk has gained momentum with his fast growing automotive company Tesla Motors. Tesla is revolutionizing the automotive industry by to creating luxurious and affordable all electric vehicles. Tesla’s first production car was the roadster and was debuted in 2006 and released to customers in 2008. Despite recent success, Tesla, however, did experience a financial set back that almost led to bankruptcy in the past. In 2009, Tesla luckily received a $465 million interest-bearing loan from the United States Department of Energy that allowed the auto maker to stay in business and continue forward with the production of today’s Model S.

The Model S is the second line of cars from Tesla and caters to the demands of many consumers. Firstly, the car is a sedan model, allowing spacious room for a small family and cargo room. Secondly, the car includes a stronger battery to propel the larger car a further distance of 265 miles per charger compared to the Roadsters 245 miles per charge. On its first year of release, the Model S ranked the third best-selling plug-in electric car in 2013, falling just short from the Nissan Leaf and the Chevrolet Volt.

Today, it seems Tesla has been able to do what other automotive companies have failed to accomplish in the past, and that’s create an all-electric car that the consumers want. Many are aware of this company’s success and a troublesome future has begun. In New Jersey, the Governor has already banned Tesla from selling vehicles directly to consumers. The grounds for the ban are to protect the consumers from unlawful ‘baiting’ from the manufacturers. Concordantly, direct distribution to the customer eliminates the middle man of a distributer, which further strangles competition. The law is nothing new and has been around for over a decade and is prominent in 48 states.

This can be a big speed bump for Tesla because it makes it more difficult for consumers who not only want to purchase Tesla cars but also individuals who may be interested in learning more about Tesla cars. Because direct sale to consumers is prohibited, individuals will have to make out of state purchases, which may not be close to them at all, while also subjecting them to higher loan rates and licensing fees. If Tesla were to deal through a distributer, there is great fear that salesmen are less likely to sell or promote Tesla cars because their majority products would be gasoline type vehicles.

This goes to show the binary dichotomy involved between a paradigm shift and associated politics. Even if the consumers want a product that a manufacturer has to offer, there will always be a middle man to prevent a transaction, possible to even acquire a piece of the share.