In the ongoing battle between Californian automaker Tesla Motors and powerful auto dealer associations across the U.S., both houses in the Commonwealth of Pennsylvania have now passed a compromise bill permitting Tesla to own and operate up to five retail locations across the state.
Originally introduced to the lower house as a pro-Tesla bill proposing Tesla be allowed to open an unlimited number of stores across the Keystone State, the bill faced heavy criticism from auto dealer unions and, for the first time automakers too. As a consequence, the original bill was amended to limit the total number of Tesla stores.
When the bill first entered into the lower house earlier in the spring, the Alliance of Automobile Manufacturers vehemently opposed the original bill. Representing twelve different vehicle manufacturers, the AAM said the law — which only allowed Tesla exemption to operate a direct sales model — needed a cap on the number of stores Tesla could operate in order to remain competitive.
The revised bill, passed by the Senate last week and passed by the House 197-2 yesterday, allows for a maximum of five Tesla retail stores across the state, along with expanded service centre provision for Pennsylvanian customers.
The new law, when signed onto the books by Republican Governor Tom Corbett, will add Pennsylvania to a growing number of states where Tesla is welcome to sell its electric cars direct to customers without resorting to using franchised third-party dealerships.
For the past several years, auto dealer associations across the U.S. have been lobbying lawmakers to ban Tesla and its direct-to-customer sales model from being allowed everywhere from Arizona to Utah. But while auto dealer unions initially won the fight in states like Arizona and Texas, pushing anti-Tesla legislation onto the books, fierce support from Tesla owners and EV advocates both in and out of government have seen Tesla’s business model slowly regain popularity among legislators.
“Tesla is seen as a kind of new, hip, up-and-coming company in the auto business,” Karl Brauer, a senior analyst with Kelley Blue Book told Bloomberg yesterday. “Some of the initial reactions against them by dealers in other states may have backfired a bit on the dealers — making them seem a little too tied to the past.”
For Tesla, being allowed to operate five stores in the state of Pennsylvania isn’t ideal, but it’s far better than an outright ban. As a consequence, the Californian automaker is upbeat.
“We hope the process in Pennsylvania serves as an example for how productive cooperation can lead to a win for all parties involved, dealers and legislators included,” Diarmuid O’Connell, Tesla’s vice president for business development, said in an official statement released yesterday.
Now there’s just one challenge left for Tesla: convince other states to follow Pennsylvania’s lead.
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