tesla direct sales

For most of the world, it’s simply difficult to imagine that in some states in the US, Tesla is not allowed to sell its vehicles directly to customers because of laws banning automakers from operating dealerships – even automakers that have never been part of the third-party franchise dealership model before.

But I think this video of Don Hall, president of the Virginia Automobile Dealers Association (VADA), will help people understand what Tesla is up against in those states. A video of Hall addressing the members of his dealership association following Tesla’s request for a dealership license is a great example of the mentality of the car dealership when it comes to their monopoly on selling vehicles.
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After the update on Tesla’s challenge of direct sales law in the Utah Supreme Court earlier this week, we have another development in Tesla’s fight to sell its vehicles directly to consumers. In order to promote a new legislation to allow Tesla to sell its vehicles without having to go through third-party dealerships, as the law forces automakers to do in Michigan, Tesla owners are giving test drives circumventing the ban.
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Tesla is fighting restrictive direct sales laws in several markets like in Texas, Connecticut, Michigan, Indiana , but its fight in Utah is now the most “high-profile” since Tesla is challenging the state in its supreme court after it was blindsided out of its store.

The automaker built a $3 million store in Salt Lake City last year, but the full-fledged store was demoted to a gallery/service center two weeks before opening due to the Utah attorney general’s office ruling that it was against the state’s direct sales law following complaints from the local dealership association.

Now that the case is before the court, in order to counter the automaker’s argument that they are not good at selling electric vehicles, dealerships are saying that they could sell Tesla’s vehicles simply because “they have four wheels”.
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Earlier this month, we reported on the North Carolina Department of Transportation (NCDOT) and the DMV holding hearings to decide whether or not to allow Tesla to get a second dealership license in order to operate another store in the state without having to go through a third-party franchise dealerships.

Now we learn that the DMC ruled against Tesla obtaining a second dealership license last week, which results in the automaker’s latest store in Charlotte having to operate as a ‘gallery’.
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During a convention held in Dallas last week, Texas state GOP delegates endorsed new Tesla-backed language in the party platform to allow direct sales of vehicles in the state. About 90 percent of the more than 8,000 delegates supported the new proposal.

This new support is likely to be a big help for Tesla’s next effort to push new legislation in order to sell its cars through company-owned stores in Texas – something the company has been trying to do since 2013.

Tesla had a booth at the convention and discussed its situation in the state with thousands of delegates.

Under the current state’s laws governing car sales, as an automaker, Tesla cannot sell its vehicles to consumers and is required to go through third-party dealerships – something the company refused to do as per its business model.
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The North Carolina Department of Transportation (NCDOT) is currently holding a hearing to decide whether or not to allow Tesla to get a second dealership license to operate in the state without having to go through a third-party franchise dealerships.

Tesla currently operates a store and service center in Charlotte and a service center in Raleigh. The automaker is now trying to get a second sales license since having won a legislative battle that successfully stopped a bill from outright banning direct car sales in the state back in 2013.
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While the bill SB3, a new legislation to allow electric automakers to sell directly to consumers in Connecticut, appeared to have died during the weekend after bill sponsor Bob Duff said that his caucus was divided on the issue and that he didn’t have the votes:

“I think the car dealers and others have been very effective in lobbying in their favor. We’ll come back again and try in another year.”

Now in a last-ditch effort as the legislative deadline approaches on Wednesday night, Tesla offered the state a new distribution center with 150 jobs to sweeten the deal.
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For the second year in a row, Tesla tried to pass a bill sponsored by Senate Majority Leader Bob Duff, D-Norwalk in Connecticut, to allow the sale of electric vehicles directly to consumers without having to go through the franchise dealerships model. Last week, the bill SB3 was in consideration and awaiting a vote in the state Senate, but it is now officially dead following an impressive lobbying campaign led by GM and the local dealership association.

The electric automaker is currently entrenched in several battles over its business model of selling directly to consumers without a third-party dealership. While it is not an issue in most of its markets, Tesla is not allowed or under restrictions to sell its cars in several states including Arizona, Michigan, Texas, Connecticut, Utah and West Virginia.
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Tesla is currently facing strong opposition from the dealership lobby in Connecticut over a new legislation that would allow the automaker to sell directly to consumers in the state. The bill SB3 is currently in consideration and awaiting a vote in the state Senate. It would enable Tesla to open up to 3 stores in the state.

Besides the dealership monopoly, Connecticut has been very friendly to Tesla, offering up the first Supercharging stations on the East coast, hosting a service center in Milford and an upcoming Gallery multi-purpose location in Greenwich.

This week Tesla published the results of a survey showing strong support for its direct sales business model in the state, but the Connecticut Automotive Retailers Association is challenging the relevance of the survey.
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According to a new report from the Wall Street Journal (paywall), Tesla’s legal team has been preparing for a challenge of direct sales law before the federal court instead of the state by state battles that the company has been fighting for years now.

Due to its business model of selling directly to consumers without a third-party dealership, Tesla is currently not allowed or under restrictions to sell its cars in several states including Arizona, Michigan, Texas, Connecticut, Utah and West Virginia.
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A bill proposed by Senate Majority Leader Bob Duff to allow electric vehicle makers in Connecticut to bypass direct sales laws and sell directly to consumers, also called the “Tesla bill”, has been “overwhelmingly endorsed” by the transportation committee on Monday. The legislation will now be moving to the state senate for a vote.
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After a small win in Indiana, where a state Senate committee decided to table for further review a bill that would have prohibited Tesla to sell its cars directly to consumers and forced them to go through third-party auto dealerships, the automaker is readying to challenge the states of Utah and Connecticut over similar direct sale laws.

Connecticut Senate Majority Leader Bob Duff introduced a bill that would allow electric car manufacturers to sell their vehicles directly to Connecticut consumers. The bill would represent a compromise similar to agreements Tesla has in other states like New Jersey or New York, where the automaker is limited to a certain number of stores, in the case of Connecticut, it would be three stores across the state.
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