Connecticut Considers Pro-Tesla Exemption to Auto Dealer Bill, Allowing Direct-to-Customer Sales

The war between Californian automaker Tesla Motors and the powerful auto dealer associations across the U.S. which seek to prevent it from selling its luxury all-electric cars direct to customers through its mall-based Tesla Stores has been raging for as long as Tesla’s full-size Model S has been on sale.

Sometimes, Tesla has won a battle, gaining permission from a particular state or municipality to open and operate a store. Sometimes it has failed, receiving legislative or regulatory bans that force customers within certain states to go to great lengths to buy the car of their dreams.

Tesla hopes Connecticut will pass a pro-Tesla exemption to its existing auto dealer laws.

Tesla hopes Connecticut will pass a pro-Tesla exemption to its existing auto dealer laws.

With the start of the new year comes another round of legislative battles, the first of which, if passed, would grant Tesla an exemption to Connecticut’s existing auto dealer legislation banning direct-to-customer sales.

The original statue, backed by auto dealer associations, sought to protect the then vulnerable independent auto dealers from powerful automakers, setting out a series of measures which prevented car companies from undercutting their dealers and ensuring a fair playing field for customers and dealers alike. But over time, those laws have enabled auto dealers themselves to become powerful and overbearing, giving them permission to add additional charges to bills, set their own prices and ultimately make things harder for car buyers.

Tesla’s direct-to-customer sales approach seeks to change that, with clear, uniform pricing across the U.S., a guaranteed level of service and exemplary customer service. But when Republican State Senator Art Linares from Connecticut tried to buy a a Tesla Model S in his own state, he discovered that the law in Connecticut currently banned Tesla from using that business model there.

Instead, as GreenCarReports details he was forced to cross the state line and make his purchase in White Plains, New York, a substantial trip for anyone who just wants to buy the electric car of his or her choice.

Tesla hopes to be able to sell its all-electric cars direct to Connecticut customers through its mall-based Tesla Stores in the near future.

Tesla hopes to be able to sell its all-electric cars direct to Connecticut customers through its mall-based Tesla Stores in the near future.

With a State Senator on its side, Tesla is hopeful that the bill — already widely supported in the Connecticut House — will pass in its favour.

Representative Tony Guerrera, a Democratic co-chair of the Legislature’s Transportation Committee, seemed equally optimistic.

“I think it’s something we need to talk about and have a conversation about, and have experts tell us why it’s good and why it’s not good,” he told the Associated Press. While he describes the legislation as having a few details to be ironed out, the Representative acknowledged the all-American Model S is growing in popularity among consumers in the area.

On the other side of the coin, auto dealer associations are arguing their case as to why Tesla should not be allowed to sell directly to customers. At the moment, their key argument revolves around the financial woes and subsequent bankruptcy of Fisker Automotive. When the company declared bankruptcy back in 2012, many owners were left without dealer support or service for their expensive $106,000 range-extended sports coupe.

Yet Tesla is a different beast to Fisker, and unlike Fisker — which generally sold to customers through franchised dealerships — Tesla maintains its own network of stores and service centres to ensure that customers needs are always met. It has also survived far longer than its plug-in rival.

Only time will tell now if the state legislature in Connecticut agrees.

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