For as long as it has owned and operated its own Tesla-branded showrooms where customers can test-drive cars, place orders and arrange after sales service, Tesla Motors [NASDAQ:TSLA] has been the subject of numerous new legislative efforts across the U.S. designed to prevent Tesla from circumnavigating franchised auto dealers altogether and selling direct to customers.
Nearly always backed by pro auto-dealer entities or legislators who have previously relied on auto dealer donations to fund their election campaigns, the various legislative attempts to ban Tesla from selling direct to customers within each of the fifty states have been met with varying levels of success. Sometimes, anti Tesla legislation has been passed and signed into law with little resistance from those in power. Other times, bills have died on state senate or house floors after successful lobbying by Tesla and its supporters.
Sometimes, such bills have even been overturned by the judiciary as being anticompetitive or unconstitutional. But as time has progressed and Tesla has gained more support across the U.S. among consumers thanks to increased sales figures and increased publicity, the fight from auto dealers and traditional automakers has become increasingly nasty. Even automakers like General Motors — which has been careful in recent years to promote its love of electric cars ahead of the launch of the 2017 Chevrolet Bolt EV — have tried to get in on the action, eagerly stabbing Tesla in the back in an attempt to keep the status quo in place.
The latest battleground in Tesla’s ongoing fight for the right to sell its cars directly to customers? An amendment to Indiana House Bill 1254 which Tesla claims was authored and pushed directly by lobbyists working for General Motors and could make it illegal for any manufacturer to hold a car dealer license in the state after 2017.
As Electrek reports, Tesla is already mobilizing its existing customers and fans to try and ensure the amendment isn’t passed. In a recent letter sent to owners and enthusiasts in the state, Tesla asks residents of the state to contact their representatives immediately and ask them to ensure the amendment dies on the senate floor.
The original bill, authored by Representative Kevin Mahan (R, District 31) was introduced to the Indiana House on January 11 this year. Concerning the topic of new motor vehicle dealers and manufacturer licenses, it originally proposed banning automakers from selling their cars direct to customers through their own company-owned showrooms, protecting the livelihoods of franchised third-party dealerships. Most importantly however, the bill — which proposed modifying existing auto dealer laws — had a specific set of exceptions to the new rule. If an automaker met those criteria, it could continue to sell direct to customers.
These exceptions included a clause that allowed a company that traded “exclusively in all-electric motor vehicles of the manufacturer’s line make,” a clause to ensure that any individual person licensed as an auto dealer did not hold a “controlling interest” in the manufacturer, that the manufacturer established at least one permanent service and repair centre for each and every dealership that sold its cars within the state, and most importantly, that the manufacturer in question had offered all-electric vehicles for sale in Indiana on a “continuing basis since July 1, 2015, or earlier.”
It’s worth noting at this point that unlike most states in the union, Indiana currently has a fairly relaxed set of auto dealer laws on its books. In fact, the existing law makes it possible for Tesla — or any other automaker — to legally apply for and obtain a dealer license to sell cars direct to customers. And it is under this law that Tesla was able to apply for its own dealer license in 2014 to open its first Tesla Store in the state, located at the Fashion Mall, Keystone.
In short, even in its original form, HB1254 represents an attempt to lock down consumer choice and increase auto dealer legislation in the state. But as the bill has progressed through the various House Committees, it has gained an amendment which drastically changed the scope and the meaning original bill, specifically cutting Tesla out of the picture altogether.
In fact the latest version, passed by the Indiana Senate Committee on Commerce & Technology last week and allegedly written by General Motors, would make it impossible for Tesla to continue to trade in the state as it currently does.
As Electrek notes, GM has a lot of influence in Indiana, operating several factories in the area that are responsible for millions of dollars of revenue for the local economy every year. And GM, with its own long-range car in the form of the 2017 Chevrolet Bolt EV, is eager to try and compete in a franchised-dealer world rather than through a direct-sales model.
Its argument? Doing so would even the playing field and ensure that Tesla operates by the ‘same rules’ as everyone else. But with Tesla currently having no experience in franchised dealerships — nor any franchised dealer networks to call on — it would actually put the California automaker at a disadvantage. It would also increase Tesla’s overheads and the price paid by its customers for their new cars, a fact that would play in GM’s favour, especially considering its plans to bring the 200-mile 2017 Chevrolet Bolt EV to market for the same kind of price as Tesla’s long-awaited long-range 2019 Tesla Model 3 sedan.
In its letter, which we’ve reproduced below, Tesla says a follow up hearing to the Senate Committee will take place on Thursday this week at the Capitol Building in Indiana. As always, we’ll keep our eyes and ears open and let you know as soon as we do if the bill or its amendments are passed — or if they die on the Senate floor.
Tesla Owners and Enthusiasts:
We need your help. Yesterday, the Indiana Senate Committee on Commerce & Technology held a hearing on a bill that would shut down Tesla in the state. Authored and pushed by General Motors, HB1254 with amendment 3 would prohibit any manufacturer from being able to hold a dealer license after December 31, 2017. Existing law allows ANY manufacturer to apply for a dealer license without the use of independent franchised dealers. Despite having a lawfully granted license to sell Tesla vehicles directly since 2014 at the Fashion Mall at Keystone; despite contributing over $42 million to the state through the purchase of parts and components from Indiana suppliers; and despite plans underway to construct a 26,000 square foot Tesla Service facility that will employ approximately a dozen Indiana residents and serve our customers, GM is pushing the Senate Committee to shut out Tesla.
Here’s how you can help: please contact your local Senator – and if you live in one of the districts covered by any of the following Committee members, we urge you to reach out and let them know they should not shut out Tesla. You can find your Indiana legislators here.
- Chairman Buck: [email protected] , (317) 232-9466
- Senator Merritt: [email protected], (317) 232-9533
- Senator Delph: [email protected], (317) 232-9541
- Senator Head: [email protected], (317) 232-9488
- Senator Houchin: [email protected], (317) 232-9814
- Senator Leising: [email protected], (317) 232-9493
- Senator Tomes: [email protected], (317) 232-9414
- Senator Breaux: [email protected], (317) 232-9534
- Senator Broden: [email protected] , (317) 232-9849
- Senator Randolph: [email protected], (317) 232-9432
A follow up hearing will be held next Thursday, February 25, 2016, at the Capitol building. Let your voice be heard before that hearing to let them know that Indiana should encourage innovation, economic growth and consumer choice. Don’t let GM tell you that your only option is to buy a car from a traditional franchised dealer by shutting out Tesla.
Thank you for your support and willingness to help Tesla stay and grow in Indiana. As always, when communicating with legislators, please be polite and respectful. Personal attacks should be absolutely avoided as they will only hurt our cause! Thank you again.
What do you make of the bill and its amendments? And how do you feel about the alleged authors of the same?
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