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Indiana - HB1254 to Shut Tesla out of the state!

Skotty

2014 S P85 | 2020 3 P19"
Jun 27, 2013
2,438
1,751
Kansas City, MO
Not certain I have all the latest, but item (e) of HB1254 Amendment 3 says this:

After December 31, 2017, a manufacturer of motor vehicles may not hold a new motor vehicle dealer license issued under IC 9-32-11, except for purposes of operations that, as described in IC 9-32-13-23(a)(3), are not considered competing unfairly with a franchisee.

This seems like it could be an exception that allows Tesla to continue with it's current business model in the state. It seems to me Tesla could fall under this exception unless either "operations" is defined in such a way that it would exclude Tesla, or if IC 9-32-13-23(a)(3) would classify Tesla as competing unfairly with a franchisee. (I'm going to assume that by franchisee, they mean only franchisee's for the same company; this is a bit of an ambiguity)

I tried to find the full text but actually haven't found it yet, to see if they specifically define what "operations" includes.

I did find IC 9-32-13-23(a)(3) and it says this:

IC 9-32-13-23 -- Unfair practices by manufacturer, distributor, officer, or agent.

Sec. 23. (a) It is an unfair practice for a manufacturer, distributor, officer, or agent to do any of the following:

(a)(3) -- Establish or acquire wholly or partially a franchisor owned outlet engaged wholly or partially in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement or, if noexclusive territory is designated, competing unfairly with the franchisee within a reasonable market area. A franchisor is not considered to be competing unfairly if operating:
(A) a business for less than two (2) years;
(B) in a bonafide retail operation that is for sale to any qualified independent person at a fair and reasonable price; or
(C) in a bonafide relationship in which an independent person has made a significant investment subject to loss in the business operation and can reasonably expect to aquire majority ownership or managerial control of the business on reasonable terms and conditions.

I don't see that this would apply to Tesla.

I'm curious as to what about the wording would disallow Tesla from continuing to hold a new motor vehicle dealer license if they are not competing unfairly with a franchisee (which as often the case in these situations, is generally true because Tesla has no franchisees to compete unfairly with).

Thoughts?
 

Nomad

Member
Dec 19, 2014
103
54
NE Indiana
Following the IC numbers is quite the rabbit hole. The digest, however, plainly states that the intent is as follows: "Prohibits a manufacturer from engaging in direct sales of new motor vehicles to consumers."

EDIT: My contact in the General Assembly says they read it as exceptions for startups. In other words, replace franchisor with Tesla, and it reads as follows:

A franchisor, such as Tesla, is not considered to be competing unfairly if operating:
(A) a business for less than two (2) years;

Unfortunately, Tesla has been a business for more than 2 years, so it doesn't qualify for the exception.
 
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FlasherZ

Sig Model S + Sig Model X + Model 3 Resv
Jun 21, 2012
7,024
1,013
In case you did not receive the email -- see below.

Any thought/interest about the value of a Tesla meetup in front of the Capitol next Thursday?

If you can, do it! There's always value. When we did this for Missouri, it drew a *lot* of attention from lawmakers and lobbyists alike, who came out to talk about our experiences. One legislator came up to me and told me that this issue generated the highest number of calls to his office in a very long time.
 

Skotty

2014 S P85 | 2020 3 P19"
Jun 27, 2013
2,438
1,751
Kansas City, MO
Following the IC numbers is quite the rabbit hole. The digest, however, plainly states that the intent is as follows: "Prohibits a manufacturer from engaging in direct sales of new motor vehicles to consumers."

EDIT: My contact in the General Assembly says they read it as exceptions for startups. In other words, replace franchisor with Tesla, and it reads as follows:



Unfortunately, Tesla has been a business for more than 2 years, so it doesn't qualify for the exception.

Interesting! I originally read points A, B, and C as an "or" condition for all three items. There is an "or" at the end of B. However, there is neither an "or" nor an "and" following A (and if it were an "and", you would still need to define how the operator precedence works). Is there a legally appropriate way to interpret the relationships between A, B, and C given the wording? If not, then the meaning would seem to be ambiguous. Clearly there is an "or" condition between B and C, but how A relates to B and C is seemingly undefined.

Furthermore, less interesting, but you might can still drop down the rabbit hole of arguing that Tesla isn't a franchisor since they don't have any franchisees.
 
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McMuggets

Member
Dec 28, 2014
458
303
North America
Hi all. Just wanted to chime in as a Canadian here. After seeing all this news come to the forefront, it is absolutely baffling that I can buy an American made Tesla easier than many Americans can. Tesla (and any other car maker) can sell whatever they want here, however they want. They've set up mall locations and have CPO's here, and you can walk in and drive it off the lot. Always thought Canada would have been the country with such government restrictive laws vs. the USA. What ever happened to the "Land of the Free?". My hopes are with you in fighting these crony laws that stifle competition and free-market capitalism that America should be the leader in.

It shouldn't even be a "Tesla vs. GM" thing, it should be about liberty to make your own decisions and buy what you want to buy without people telling you how or what you are allowed to buy. You should really send this issue out to not only your EV friends but also to every libertarian/tea party sympathizer even if you do not subscribe to their tribe. They should be absolutely appalled at this type of stuff happening in Indiana, Utah, etc. Just let them know that Canada is more free in this respect... that's gotta hurt.
 

Lanny

~
Nov 29, 2011
938
1,665
MD
Does GM Have a Level Playing Field with Tesla in Indiana?

Tesla responds:


Lanny
 
Last edited by a moderator:

Zarwin

Member
May 12, 2014
602
675
Hillsborough, NC
Here is the full Indiana General Assembly Commerce & Technology Committee discussion of HB1254 on Feb 18th 2016. It's worth a watch, especially the first 18 minutes, to get an idea of the mindset. At one point a representative is actually suggesting that since Teslas are so expensive, it's not a big deal to raise the price a bit, to enable the dealership to profit.

Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

For those that don't want to watch the whole thing, here are some direct links:

First 18 minutes are introduction by Sen. Buck (committe chair) and presentation and discussion of the bill by Rep. Mahan and Sen. Kenley

Tesla VP of Regulatory Affairs James Chen 18:35
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #1 57:35
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #2 1:03:13
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #3 1:09:30
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Service Manager 1:13:00
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #4 1:20:10
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #5 1:23:00
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube
 

chickensevil

Active Member
Jan 2, 2014
4,139
261
Virginia, United States
Here is the full Indiana General Assembly Commerce & Technology Committee discussion of HB1254 on Feb 18th 2016. It's worth a watch, especially the first 18 minutes, to get an idea of the mindset. At one point a representative is actually suggesting that since Teslas are so expensive, it's not a big deal to raise the price a bit, to enable the dealership to profit.

Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

For those that don't want to watch the whole thing, here are some direct links:

First 18 minutes are introduction by Sen. Buck (committe chair) and presentation and discussion of the bill by Rep. Mahan and Sen. Kenley

Tesla VP of Regulatory Affairs James Chen 18:35
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #1 57:35
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #2 1:03:13
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #3 1:09:30
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Service Manager 1:13:00
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #4 1:20:10
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

Tesla Owner #5 1:23:00
Indiana General Assembly HB1254 Feb 18 CTC (Anti-Tesla bill) - YouTube

In response to the first owner/employee they ask, why can't Tesla just mark up the price of the car, because it is already so expensive... uhhh? really? That's the answer!?

I would like to give a tip to anyone who does speak, I know we are all excited about Tesla and how great our experience has been, but it is important to try not to derail what is being covered in the law. I am not trying to discourage anyone from talking or representing in favor (or opposition, as the case may be) of something just that of what I have watched of legislation (unless it is at the national level, and you are a member of congress) they generally require you to stay on point.

My recommendation is to as best as possible get a copy of the item being discussed (as we can see from these threads that isn't always easy) and certainly reach out to Tesla in regard to the context of these bills/amendments and ask them questions about the context of these and how that impacts Tesla. In this way you can frame your personal opinion around those same targets and it helps to unify one message behind multiple perspectives.

In this instance, the target is surrounding the business model itself, and even the legislative members didn't understand (as we clear by the question posed to the Service Manager of why couldn't they turn over sales and still maintain service on their own) how the dealer business model actually works. Unfortunately the tough thing is figuring out what to say, absent direct questioning, that will help to guide them to this same conclusion we have all made, and if you can say the right things you can spawn additional questions from them that helps to guide them further. To that end, anyone planning to talk, whether in Indiana or elsewhere in other battles, watch the videos of those who have come before and use that information to help you frame your message in an impactful way.

The other great one to watch along these lines is the MD fight that happened. Yes, the laws are slightly different, and yes the context is slightly different, but ultimately these are a battle of business models, and allowing the consumer free choice over which model should win out. Getting whatever they are trying to pass or revoke as the case may be, targeted toward that free choice should be the goal of an owner. Good luck guys! We will win out sooner or later on this as you can only hold back innovation for so long.
 

Lanny

~
Nov 29, 2011
938
1,665
MD
chickensevil,

That's great advice for those going to testify on these bills.

I'd also add that you should try to talk to each other beforehand and divide up the talking points so that each person can address a different aspect of the bill or approach the central point from varying perspectives.

Thanks Zarwin for making the video accessible on YouTube. It's eyeopening when you actually see the nature of the questions and comments from the Committee members. There's very little time to educate the lawmakers in these hearings so we have to learn to be as efficient and effective as we can.

Lanny
 

dsm363

Roadster + Sig Model S
May 17, 2009
18,278
151
Nevada
These legislative sessions are always hilarious and yet sad. Either these guys have no clue how things work or they are playing dumb to justify their actions. "I don't see the harm in opening just one dealership". When they say it so innocently you'd think 'sure. What's the harm'. When Tesla explains that it's not their business model they are told to change their model. What happened to letting a business fail because it's model simply didn't work?
 

DCGOO

Active Member
Nov 24, 2015
1,507
894
Indianapolis, IN
I just spent an hour and a half (that I will never get back) looking at last week's testimony. I am really surprised that no one asked about the impact this bill could have on all the existing manufacturer/dealer businesses that are RV manufacturers. Big time business in Indiana, and quite a number of them sell factory direct.

Just thinking out loud.
 

Skotty

2014 S P85 | 2020 3 P19"
Jun 27, 2013
2,438
1,751
Kansas City, MO
Interesting! I originally read points A, B, and C as an "or" condition for all three items. There is an "or" at the end of B. However, there is neither an "or" nor an "and" following A (and if it were an "and", you would still need to define how the operator precedence works). Is there a legally appropriate way to interpret the relationships between A, B, and C given the wording? If not, then the meaning would seem to be ambiguous. Clearly there is an "or" condition between B and C, but how A relates to B and C is seemingly undefined.

Furthermore, less interesting, but you might can still drop down the rabbit hole of arguing that Tesla isn't a franchisor since they don't have any franchisees.

Replying to myself here -- I think A, B, and C should be interpreted as all OR conditions. However, on closer inspection, I'm not sure Tesla would fall under any of those conditions. But then again, it all wraps back around to the seemingly never ending argument about Tesla not being a fanchisor and/or Tesla not competing unfairly with franchisees, both because Tesla has no franchisees.

Such a mess.
 

Zarwin

Member
May 12, 2014
602
675
Hillsborough, NC
I just spent an hour and a half (that I will never get back) looking at last week's testimony. I am really surprised that no one asked about the impact this bill could have on all the existing manufacturer/dealer businesses that are RV manufacturers. Big time business in Indiana, and quite a number of them sell factory direct.

Just thinking out loud.
What an interesting point. I just pulled up an RV manufacturer that sells factory direct and how about that, they're based out of Indiana ... Nexus RV Motorhome manufacturer class B+ Class C Super C

Wouldnt this bill effectively kill that company? If so, someone should give them a heads up.
 

chickensevil

Active Member
Jan 2, 2014
4,139
261
Virginia, United States
Replying to myself here -- I think A, B, and C should be interpreted as all OR conditions. However, on closer inspection, I'm not sure Tesla would fall under any of those conditions. But then again, it all wraps back around to the seemingly never ending argument about Tesla not being a fanchisor and/or Tesla not competing unfairly with franchisees, both because Tesla has no franchisees.

Such a mess.

What you have to find is where they define franchisor. In some states they have equaled that term to manufacturers. The fun part of law, they make up Their own meanings for words that you thought you knew the meaning of.

You could write a law that says the government must love everyone. And then someone slips in an amendment that is on page 542 buried in the bill, that defines love to mean "for the purpose of this bill love is defined as a 90% tax on income"

And oh, the bill will also be titled "Government Love"

Welcome to how this works... It sucks... I know...
 

dsm363

Roadster + Sig Model S
May 17, 2009
18,278
151
Nevada
Listened to the entire thing as well. Just like the one in Texas from a few years ago. They ask the same questions and clearly signal they are against direct sales and bought and paid for already.
 

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