Iowa Shakes Fist, Tells Tesla To Get Off Its Property

September 26, 2014

Iowa has told Tesla to hit the road -- and not in the good way. According to the Des Moines Register, the state's Department of Transportation told Tesla to pack its bags and cut short a planned series of test drives in West Des Moines earlier this month.

Why would the DOT do such a thing? Because the Iowa Automobile Dealers Association complained. (No surprise there.)

More importantly, how could the DOT do such a thing? Because, the agency says that by offering test drives in the parking lot of a West Des Moines Mariott, Tesla was acting as a dealer. (Confused? Tesla doesn't understand the logic either.) Since dealers have to be licensed in Iowa, and since Tesla has no such license, the DOT shut the party down.

OUR TAKE

There's bad news and good news here.

The bad news, of course, is that Tesla fans in Iowa now have to travel out of state to test drive the company's Model S sedan. That's a pain for consumers and a loss of tax dollars for Iowa.

It's also bad news for dealers, because it worsens their already abysmal image. Dealer networks have proven that they're terrible at giving consumers what they want, and this only make them seem more tone-deaf and protectionist.

As if to illustrate that point, the Register cites Bruce Anderson, president of the Iowa Automobile Dealers Association. He complains that buying a car directly from an automaker like Tesla would be like buying a laptop directly from Apple: the price would be set and non-negotiable. 

In other words, Anderson sees haggling as an awesome thing. Unfortunately, more than 90 percent of car shoppers hate it, which makes the Apple model more attractive than he might think. 

The good news is that Tesla got to conduct two of its three planned days of test drives before being shut down, showing off its products and sparking interest among consumers. Whether those new fans might be able to convince legislators to loosen Iowa's franchise laws and allow Tesla to sell directly to consumers, however, is another matter entirely.

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