Tesla is currently yet again in another battle to get the right to sell its electric vehicles directly to customers in Connecticut without having to go through third-party franchise dealerships. Earlier this year, a new bill (HB 7097) has been introduced in Connecticut to allow direct sales of electric vehicles in the state.
The automaker is pushing for the bill to pass, while local dealerships are strongly opposing it.
In the meantime, Tesla has been operating a gallery in the state to promote its products without directly selling them, but now it received a cease and desist from the DMV following complaints from those same car dealers.
The DMV’s hearing officer, William Grady, wrote in the ruling via Greenwich Times:
“The clear intent of Tesla at the Greenwich ‘gallery’ is to provide the company with a means of merchandizing its motor vehicles with the further intent to conclude all activities conducted there in a sale.”
Tesla opened a store in Greenwich (pictured above), which they have been operating as a “gallery”, last year. It’s a tactic that they have employed in states they are not allowed to sell directly to consumers. Tesla Northeast General Manager Jeremy Snider commented on the gallery concept at the time:
“We created the Tesla gallery experience specifically in states where we’re not legally allowed to sell vehicles. We create Tesla galleries in order to educate the public. People have a lot of questions. Our mission is not to sell as many Teslas as we possibly can. It’s to accelerate the adoption of sustainable transport.”
Now the company claims that the Connecticut Automotive Retailers Association (CARA) tested the gallery model by employing ‘secret shoppers’ who insisted on buying vehicles directly from the employees on the location.
Diarmuid O’Connell, Tesla’s VP of business development, made the claim in a letter to legislators – asking their support for the bill to allow them to sell in the state:
Indeed, CARA learned this firsthand when it sent ‘secret shoppers’ to the Greenwich gallery in a failed attempt to trick our local employees into selling them a vehicle. Despite these fake shoppers’ repeated requests, our employees did not sell them a car or take their order. What our employees did, and what they continue to do, is educate visitors about Tesla, its cars and other products, and broadly about electric vehicle technology and its many benefits. It is a basic constitutional right for Tesla to be able to communicate with Connecticut residents about these topics. Ironically, even this limited non-sales activity is too much in the eyes of CARA, which is seeking to entirely shutter the Greenwich gallery.”
It’s not the lowest that CARA ever went to stop Tesla from selling its vehicles in the state. It published a website called ‘TeslaCrash.com’ in 2014 when a bill was first introduced and supported by the company. The website was using questionable methods to try to discredit Tesla, including featuring pictures and articles about benign accidents, hence the name of the domain.
Despite the lack of direct sales in the state, buyers continue to go to neighboring states to buy Tesla’s vehicles since there are now over 1,300 Tesla vehicles registered in Connecticut.
Jim Fleming, President of the car retailers’ group and the creator of the ridiculous ‘TeslaCrash.com’ website, is still opposing Tesla’s presence in the state without going through franchise dealerships and he is lobbying against the bill.
State bans of direct sales were first implemented to protect car dealer franchisees from having to unfairly compete against the automakers from which they bought their franchises. It makes sense to a degree, but arguably, the competition is not unfair if it’s against an automaker that is not competing with its own franchises, like Tesla.
Badly crafted legislations included all automakers in the ban, which prevents Tesla from selling its cars in some states and resulted in dealerships having a monopoly on car sales – even for companies that never had anything to do with the franchise model.
Here’s O’Connell’s letter in full: