Tesla, Vertical Integration, and Incumbent Legal Disadvantages in the New Car Retailing Market
For decades, the retail automotive industry structure stayed relatively the same. A manufacturer would sell their product to a local dealership who would then sell it to the ultimate consumer. This was true for so long that many states began enacting statutes codifying that market structure in the 1960s after independent dealers raised concerns about the manufacturers using predatory conduct towards them. As a result, a system of mandatory vertical disintegration exists across most of the country. Because of this, one could ask his grandfather how he bought his first new car and would likely find himself able to answer the question exactly the same today if he just bought a new car off the lot. Read More …