Automakers Oppose Pennsylvania Tesla Bill

Tesla's battle to either open or maintain dealerships in certain states has been, for the most part, met with resistance from dealership groups. Now a new bill introduced in the Pennsylvania legislature on Monday has the automakers pushing back. The legislation proposed by Republican state Sen. John Rafferty Jr. , the chairman of the Transportation Committee, would give Tesla Motors exclusive direct sales rights to sell EVs in the state.

From the Wall Street Journal-

"Automakers have not objected to special provisions in various states that allowed Tesla to operate outside the current dealership system because those provisions were very limited," the Alliance said in a statement, referring to bargains struck in Ohio and New York that set a cap of a few dealerships in the state. "This bill is different. The Pennsylvania bill provides a wide open door for a single automaker to escape state franchise laws, even when that automaker is the sales leader in its product segment."

The Alliance of Automobile Manufacturers, a trade group who represents the major automakers, does not oppose Tesla being allowed to sell cars in the state, but rather the provision in the bill that disallows other automakers who sell EVs to circumvent the franchise system.

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"The big auto-makers don't have the same gripe as the dealers, as they aren't concerned about Tesla's direct-sales model. They just don't want Tesla to be able to do it if no other company is allowed."

Bills like the one recently passed in NJ, gives Tesla special exceptions to the current franchise laws primarily due to the automaker's low volume and exclusive sale of EVs. Now that more automakers are jumping on the EV bandwagon, they too are suggesting they may want the option for direct sales in the future.

While I understand that the PA legislature is trying to appease both the dealership lobby and Tesla motors with this bill, the automakers have a valid critique. I still maintain that even if some automakers adopted the direct sales model, there is little evidence to suggest that all franchise dealerships would be in jeopardy. In Europe, both franchised car dealers and factory backed ones compete with each other, there is no reason why consumers can't have that choice here.

(Image credit Teslamotorsclub.com)