Tesla's Musk gears up for 'tough' battle over direct sales

SAN FRANCISCO Tue Jun 18, 2013 8:15pm EDT

1 of 2. Elon Musk, Chief Executive of Tesla Motors and SpaceX, smiles during the Reuters Global Technology Summit in San Francisco June 18, 2013.

Credit: Reuters/Stephen Lam

SAN FRANCISCO (Reuters) - Tesla Motor Inc (TSLA.O) is marshalling lawyers across the country to battle local interests such as auto dealers intent on outlawing its direct-to-consumer sales model, co-founder and CEO Elon Musk told Reuters on Tuesday.

The billionaire, who wants to sell direct to consumers but is facing strong opposition from local-level politicians and powerful auto dealerships, said Tesla will over the next few months begin a dialogue in several states with local politicians, who he said have close ties with auto dealers.

"It's a tough battle we face," he told the Reuters Global Technology Summit. "We don't necessarily have all the answers. I certainly believe that if we were to go through the regular franchise system that we would not succeed."

(For Reuters Insider video of the interview with Musk, click on reut.rs/11FigwN)

Tesla will demonstrate on Thursday a battery-replacement system that may underpin a nationwide network of fast-service swapping stations. Such a network would entail an investment of $50 million to $100 million, Musk said at the summit in San Francisco.

The idea behind that network is to speed up battery charging, which can take 20 to 40 minutes or even longer depending on what sort of device is used. He did not elaborate ahead of Thursday's announcement.

Musk's company sells the $70,000 Tesla luxury electric vehicle. Tesla's shares have almost tripled this year, a climb that accelerated after Tesla posted its first quarterly profit.

Follow Reuters Summits on Twitter @Reuters_Summits

(Reporting by Sarah McBride and Rory Carroll in San Francisco, Deepa Seetharaman in Detroit and Nichola Groom in Los Angeles; Editing by Phil Berlowitz)