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Tesla Can't Sell Cars In Arizona
November 12, 2013
If you want to test drive a Tesla you either have to go out of state, find a friend who will let you drive their high-end electric vehicle, or wait until the next manufacturer test drive in Arizona.
If you’re going to pay more than $70,000 for a car, you probably want to test drive it first. But in Arizona, customers in the market for a Tesla are only able to test drive cars a few times a year.
The process of buying a Tesla in Arizona is complicated. State law on the books since 2000 prohibits car manufacturers to sell directly to consumers. The Arizona Automobile Dealers Association said the organization supported the law to protect dealership interests and maintain competition. Since Tesla doesn’t have dealerships it can’t sell cars to customers in Arizona.
Pete Gruber bought his green Tesla Roadster a year ago.
“I didn’t go there because they weren’t selling the roadster anymore, so I bought mine from a friend," Gruber said.
Gruber did not buy his car through the company directly, he bought his roadster from a friend in Arizona. Not having dealerships is part of Tesla's business model. Elliot Rabinovich, a business professor at Arizona State University, says the company doesn’t have dealerships so it can have more control over sales.
“I think they need that control in order to introduce brand new car and technology to customers," said Rabinovich.
Rabinovich says the company doesn't use dealerships with other gasoline-powered cars because they are concerned about conflicts of interest. So instead, Tesla has a gallery at Fashion Square mall where employees educate consumers on the electric vehicles. The catch is because it isn’t a dealership, customers can’t test drive or order the car in the store. Tesla spokesperson Alexis Georgeson says in states where the company doesn’t face these restrictions, customers still can’t drive away with a vehicle.
"As a matter of fact, even in our stores you can’t because we don’t have an inventory lot outside we are trying to push and move inventory. Every single car is built to order," said Georgeson.
And that's one of the qualities that make Tesla different, according to business professor Rabinovich.
“What makes them unique is the entry in the high end of the market, the ability to customize, and make products on demand and the technology of the electric cars," said Rabinovich.
Although the car's popularity is growing, the company’s stock price dropped more than seven percent last week because of fire incidents involving several S models.