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New study shows auto executives look down on Tesla's unique business model — despite its growing popularity

Tesla has been forced to find loopholes.

Agency model, Tesla’s unique business model

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Tesla has forced change onto the automotive industry in several ways — the most notable being that it helped electric vehicles grow in popularity to the point where almost every legacy automaker is now making EVs of its own. 

Another way that Tesla is attempting to change the industry is by focusing on direct-to-consumer sales (also known as an "agency model") instead of the traditional franchise model, where cars are sold via dealerships. However, the rest of the auto industry is proving to be resistant to that change, according to Business Insider.

The reporting focuses on a recently released study from Kerrigan Advisors, which found that 35% of car industry executives "do not believe an agency model will materialize in the U.S. auto retail marketplace," while 43% were unsure, and 22% said they "think it will be introduced to the U.S. in the next five years."

Of course, automakers have bet wrong by going against Tesla's example in the past — namely, on the mass appeal of electric vehicles

According to the U.S. Bureau of Labor Statistics, "Electric car sales in the United States increased from a mere 0.2% of total car sales in 2011 to 4.6% in 2021," with that percentage continuing to rise as consumers become more conscious of their choices having an effect on the overall health of our planet.

Unfortunately for Tesla and customers who prefer the agency model instead of having to shop via car dealerships, the main obstacle to direct-to-consumer car sales is currently the existing laws in many states, where car dealerships and their lobbyists are firmly entrenched.

Tesla recently lost a lawsuit it filed against the Louisiana Automobile Dealers Association and the Louisiana Motor Vehicle Commission, alleging that the state's direct-to-consumer sales ban was unfair to Tesla. A judge disagreed. 

In other states, such as Connecticut and New Mexico, Tesla has been forced to find loopholes, such as operating its showrooms on tribal lands.

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