The VICE Channels

    Why Tesla Is Making Auto Dealers Nervous

    Written by

    Derek Mead


    Tesla, hot on the heels of winning Car of the Year awards for its electric Model S, appears to have hit a massive milestone for electric vehicles: the point at which they can fill up just as fast as a gas car can. By unveiling a new process for battery swaps, Tesla claims it can give drivers a full battery in about 90 seconds for the price of a regular old fill-up.

    Now, whether or not Tesla's battery swaps really take off is still up in the air—the stations cost around $500,000, and drivers must return to pick up their original battery or pay for the new one, which means adoption is a big undertaking. Still, there's one sign Tesla's finally cracked the EV code: New York auto dealers have joined a number of other states, including North Carolina, Virginia, and Texas, in trying to bar Tesla from selling its own vehicles.

    Dealerships have been up in arms because Tesla sells its vehicles directly from company-owned stores; all other major auto manufacturers in the US sell their vehicles in bulk to individual dealerships, who then turn around and sell them to customers.

    Now, no one should be surprised that dealers are trying to protect their interests. But what is surprising is that so many state dealership associations (and not just those in notoriously EV-averse states like Virginia) consider Tesla a threat. For all intents and purposes, Tesla still build niche luxury vehicles that have yet to sell in volumes anywhere near the magnitude of major manufacturers. But as Tesla continues to break down barriers to EV adoption, more and more dealers are getting nervous that they'll be cut out of the EV revolution.

    A pair of bills floating around New York's State Assembly and Senate were aimed at banning manufacturers from selling directly to consumers, and also was aimed at preventing directly-sold cars from being registered in the state. Tesla said that passage of the bills would have forced it out of the state, but they failed to pass during this legislative session, which means new action won't be taken until the legislature reconvenes in January.

    There's one reason electric cars haven't taken off: batteries suck. Gasoline is fantastic for transportation as it contains lots of energy and is easy to refuel. Comparatively, batteries don't store much energy and take forever to recharge, which means that the vast majority of Americans won't buy an electric car for fear of not being able to drive more than 100 miles off into the sunset.

    Combine that with the fact that the automotive industry is now so stable that new manufacturers are pretty much guaranteed to fail, and you can see how easy it would be for dealers to dismiss Tesla's encroaching on their business model. But Tesla has so far flipped the script: the Model S has so far been a resounding success, largely due to its massive range, and the firm continues to work around the inherent battery problem. 

    It's not all figured out yet. Tesla's Supercharger network still needs to be built, it's unclear how well the battery changing tech will be adopted and work in the wild, and the young company needs whatever models follow the Model S to also be a success, as it's only just begun to turn profits. Still, that auto dealers are taking Tesla so seriously is great evidence that we all should.