Last week, Tesla’s battle to get the right to sell its electric vehicles directly to customers in Connecticut without having to go through third-party franchise dealerships took a turn when the DMV issued a cease and desist for Tesla’s only gallery in the state after complaints from local dealerships.
A bill that would allow Tesla to sell in the state was narrowly approved by the tax-writing legislative Finance Committee on Monday and it will now be going to a vote in the house.
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The vote was 25 to 20 in the committee.
A local newspaper, Newstimes, collected some comments from representative opposing the bill HB 7097.
Sen. Michael A. McLachlan, R-Danbury, said:
“I think it’s a cool car. I don’t feel comfortable kicking aside 100 years of franchise law in the state of Connecticut. I’m perplexed in trying to understand why the Legislature is willing to carve out a special exception for one company and kick aside this long history of success for new car sales in the state of Connecticut.”
Of course, what worked 100 years ago doesn’t necessarily make sense today.
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, like Connecticut, and resulted in dealerships having a monopoly on car sales – even for companies that never had anything to do with the franchise model.
Along with McLachlan, Rep. Jason Perillo, R-Shelton, is leading the opposition to the bill:
“It would seem to me that there is a very simple compromise right in front of us. We have a car manufacturer that wants to sell cars through dealerships in Connecticut and we have existing dealerships that don’t want to disrupt the system that’s been in place for many years. So in order for both of those parties to accomplish what they want, the solution is simple: Tesla can sell cars through the dealerships that exist in Connecticut right now.”
It would appear that Perillo doesn’t know the meaning of the word “compromise” since what he is describing is the statu quo. The law as it currently stands would allow Tesla to sell through third-party dealerships – no compromise needed for that, but that’s what they are seeking to avoid. They don’t see why they should be forced to sell their products through a middleman when they could sell or service their own products, especially when car dealers have historically been unsuccessful in selling electric vehicles.
A recent study on the electric vehicle shopping experience partially gave reason to Tesla and found that a lot of dealerships are not even charging electric vehicles on their lots resulting in potential buyers not being able to get test drives.
Tesla started a website for local EV enthusiasts and Tesla owners to help push the bill with their representatives. They made a “fact vs fiction” sheet about the bill: