More Evidence That the Dealer Model Can't Work for Tesla Motors Inc.

Tesla Motors wants to sell its vehicles directly, but auto dealers feel threatened. Fortunately for Tesla investors, consumers don't seem to be opposed to the electric-car maker's attempts to bypass the franchise model -- it's just the dealers who want to stop Tesla. Still, dealer lobby groups are seeing some success at infringing on Tesla's attempt to sell its vehicles directly to consumers. Should investors be worried that the direct model isn't going to work for Tesla? Put another way: Is having consumers on Tesla's side enough to help the company overcome the hurdles facing it as it looks to expand its direct sales model over the long haul?

As Fool technology specialist Daniel Sparks explains in the video below, the clarity of Tesla's argument should be enough to help the company stick to its direct model. To highlight just exactly how clear Tesla's argument is, Daniel points to General Motors' currently failing attempt to use the franchise model to sell the Cadillac ELR plug-in hybrid as evidence that Tesla's argument has grounds.

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The article More Evidence That the Dealer Model Can't Work for Tesla Motors Inc. originally appeared on

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends General Motors and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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