Anti-Tesla law in Michigan 'unnecessary protectionism,' AutoNation chief says

Tesla got an unexpected defense from AutoNation CEO Mike Jackson, who called auto-dealer efforts to ban all direct sales by Tesla Motors state by state 'unnecessary protectionism.' Still, Jackson called the automaker's direct-sales model 'inefficient'. 

Ringo H.W. Chiu/AP/File
A guest test drives Tesla Motors' new version of its Model S sedan, the P85D, in Hawthorne, Calif.

Never let it be said that AutoNation CEO Mike Jackson doesn't speak his mind.

His latest stunner came last week, when he deemed auto-dealer efforts to ban all direct sales by Tesla Motors state by state "unnecessary protectionism."

In doing so, Jackson broke ranks with the vast array of auto-dealer organizations and lobbyists who have spent five years working to change state laws to require Tesla to sell its electric cars through independent third-party businesses, i.e. car dealerships.

Jackson's quotes came in The Detroit News, commenting on Michigan governor Rick Snyder's signing of a bill that more explicitly outlawed Tesla's sales model in the home state of Fiat Chrysler, Ford, and General Motors.

In explaining his position the AutoNation CEO made the same point that most journalists have long cited in covering the ongoing battle between Tesla Motors and car-dealer lobbyists.

Laws that forbid auto companies from selling directly to consumers were enacted to protect existing franchised dealers from unfair competition.

Auto companies understandably want more control over the car-buying experience--which many car buyers loathe and despise--but dealers feared the carmakers could undercut them on prices or deprive them of hot-selling models, ultimately driving them out of business.

As Jackson pointed out in a speech to the Detroit Economic Club on Thursday, Tesla has no franchised dealers to protect.

That means changes in state laws that extend the ban from direct sales where franchised dealers exist to any direct sales under any circumstances are aimed directly at Tesla.

Not that Jackson thinks that Tesla's direct-sales model is the right one.

"If Elon Musk wants to make a mistake and go with an inefficient distribution system," he told the audience, "that's his right as an American."

Jackson said AutoNation wasn't "afraid" of Tesla and its model: "My phone will ring someday when he really wants to sell some cars."

Jackson has been refreshingly outspoken for years. He has long favored higher taxes on gasoline as a better and more stable way than corporate average fuel economy rules to get consumers to buy and drive more efficient vehicles.

"Cheap gasoline combined with fuel efficiency mandated by the government," Jackson famously said several years ago, "is an economic disaster for America.”

His comments on Tesla respond to current news, but Jackson's comments on gas taxes seem particularly apropos these days, with gasoline prices falling to new lows each week.

In his speech, however, Jackson also highlighted the benefits Tesla has received from various Federal and state incentives programs to get buyers to choose electric cars.

AutoNation sells more than half a million cars a year through its network of 220 multi-line dealerships.

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