Tesla has been getting pushback in several states where auto dealers have been lobbying against the electric vehicle (EV) maker's direct sales model which circumvents the car dealership apparatus long established in many U.S. markets.

Now the cavalry may be coming to the Palo Alto, Calif.-based company's rescue in the form of the Federal Trade Commission.

Several FTC officials on Thursday weighed in on the issue in a post on the commission's official blog, suggesting that long-standing laws prohibiting direct sales of new vehicles are no longer useful, practical, or protective of consumers and characterizing such rules as "bad policy."

"For decades, local laws in many states have required consumers to purchase their cars solely from local, independent auto dealers. Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries," wrote FTC directors Andy Gavil, Debbie Feinstein, and Marty Gaynor.

Tesla has run into opposition to its online, direct sales operation in states like Texas, and most recently, New Jersey, where in March the EV maker was ordered to shut down its sales operations as of April 1.

The FTC directors argued that there are several reasons why the prohibition of direct auto sales in many states had outlived its purpose, beginning with the notion that there has been a fundamental change to the way products and services are distributed with the advent of the Internet.

"Consumers once shopped predominantly at their local stores; but first mail order catalogs and today the Internet have created new ways to shop for and purchase a wide range of goods and services," they wrote. "Similarly, consumers once arranged for taxis by hailing one from a street corner or by calling a dispatcher; yet today, smartphones and new software applications are shaking up the transportation industry, creating new business opportunities and new services for consumers."

Gavil, Feinstein, and Gaynor also appeared to argue that as a relatively small player in the auto industry, Tesla should be afforded the ability to expand its business without being hampered by direct-sales bans.

"Out of 15 million cars sold in the U.S. in 2013, Tesla accounted for a little over 22,000. This hardly presents a serious competitive threat to established dealers. What it could represent is a real change to the way cars are sold that might allow Tesla to expand in the future and prove attractive to other manufacturers, whether established or new ones that have yet to emerge, and consumers," the FTC directors wrote.

That's an interesting take on the distribution battle Tesla is facing and one the FTC directors tacitly admitted turns on its head the original rationale for many states' bans on direct auto sales. As Gavil, Feinstein, and Gaynor noted, those prohibitions were originally enacted to protect local, independent auto dealers from a "perceived imbalance of power between the typically small local dealers and major national manufacturers," with the local dealers persuading lawmakers that "they needed protections from abusive practices by manufacturers."

But the FTC directors argued that instead of reasonably defending the interests of small, independent car dealers as originally intended, state laws banning direct sales of new cars to consumers have become "protectionist" instead of "protecting."

"Such blanket bans are an anomaly in the broader economy, where most manufacturers compete to respond to consumer needs by choosing from among direct sales to consumers, reliance on independent dealers, or some combination of the two," Gavil, Feinstein, and Gaynor wrote.

Further Reading

Cars & Auto Reviews