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1 results

  • 5 - Legacies in the Crossfire

  • Daniel A. Crane, University of Michigan Law School
  • Book:
    Direct Hit
    Published online:
    13 November 2025
    Print publication:
    20 November 2025, pp 72-86

  • Summary

    The legacy Detroit manufacturers were between a rock and a hard place. Having just emerged from near-death experiences during the 2008–09 financial crisis, they now had to face the onslaught not only of EV technology that they had long resisted but also of a company that refused to play by the settled rules on how cars are sold and serviced. Led by General Motors (GM), the legacies decided that their best tactic was to stand with their dealers and argue that Tesla should be denied direct sales, which would not only prevent Tesla from getting ahead but could keep Tesla far behind. This “raising rivals’ costs” strategy ultimately backfired, as Tesla got the right to sell direct in most states, and the legacies missed the chance to get their own right to compete with Tesla on a level playing field.