Article from the N&O:
More Tesla dealerships could be coming to NC under Senate bill
Article from WRAL:
Tesla dealership bill pops up late in session
I haven't found the actual updated bill text yet. The original House version seems to be here. Not sure where the updated Senate version will show up.
More Tesla dealerships could be coming to NC under Senate bill
Article from WRAL:
Tesla dealership bill pops up late in session
I haven't found the actual updated bill text yet. The original House version seems to be here. Not sure where the updated Senate version will show up.
BY COLIN CAMPBELL
[email protected]
The electric car company Tesla would be allowed to operate its own dealerships under a bill that was introduced Wednesday in a Senate committee.
Current state law bans auto manufacturers from owning their own dealerships, a law that protects traditional local car dealers.
Until Wednesday, House Bill 617 addressed regulations for antique car sales, but the Senate Commerce Committee stripped out that legislation and replaced it with the Tesla bill, which hadn’t previously received a hearing.
The bill doesn’t specifically mention Tesla, but it limits manufacturer-owned dealerships to electric vehicle sales and manufacturers that don’t have any traditional dealer franchises. They could only sell used vehicles they acquired as trade-ins, and the companies would be limited to six locations.
Tesla already has a dealership in Raleigh – the only one in the state – because no one objected when the company applied to the DMV for the permit. The DMV rejected a permit application for a Tesla dealership last year in Charlotte after other dealers complained.
Tesla vice president Diarmuid O’Connell told senators that allowing more of his company’s dealerships would create $50 million of investment and hundreds of jobs in North Carolina. He argued that selling directly to drivers is the “best, and perhaps the only way” to market electric cars.
Tesla sales have been a controversial subject for years, as other automakers and dealers object to the unusual business model. Lobbyists for Honda and the Alliance of Automobile Manufacturers spoke out against the bill Wednesday. They said their organizations only recently found out about the bill.
“My clients also sell electric vehicles” but the bill doesn’t give them similar sales options, said Henry Jones of the Alliance of Automobile Manufacturers. “We should not be picking winners and losers here.”
But the bill has support from the N.C. Automobile Dealers Association, which views it as a compromise.
“We think it’s very important for consumer protection that the (dealership) system is in place,” lobbyist John Policastro said. “The concept here is a limited exception.”
The bill gives auto dealer associations expanded legal powers to challenge potential violations of manufacturers’ licensing laws – a provision the manufacturers oppose.
“It is a dramatic expansion in the law,” Honda lobbyist Davis Horne said. “We don’t object to the Tesla settlement in principle, but this bill goes far beyond that.”
The Senate committee didn’t vote on the bill Wednesday but plans to in the coming days. Because the bill is a stripped-out version of a House bill, it will go directly to the House floor if it passes the Senate.
Colin Campbell: 919-829-4698, @RaleighReporter
By Travis Fain
RALEIGH, N.C. — A surprise late-session bill to let electric-car manufacturer Tesla sell direct to consumers in North Carolina materialized Wednesday at the legislature.
Other automobile manufacturers were not happy. But auto dealers, which have fought Tesla's direct-to-consumers model in other states, are on board, seeking a carve-out to a state franchise system that generally requires manufacturers to sell through them as third-party dealers.
The new language in House Bill 617, which once focused on antique vehicle sales, represents a potential compromise after more than four years of back-and-forth over Tesla sales in North Carolina. The company has a store in Raleigh, but a Charlotte location was partially blocked by the state Division of Motor Vehicles when auto dealers objected.
The company can show cars in Charlotte; it just can't sell them.
Manufacturers weren't looped in on negotiations to change that until last Thursday, according to their lobbyist, Henry W. Jones Jr. The dealers and the manufacturers had been negotiating separate legislation, Senate Bill 413, that lays out a number of changes in the basic dealer-manufacturer relationship in North Carolina.
"We shook hands on 413," Jones said. "The following day, they handed us this."
Jones spoke against the Tesla bill during Wednesday's Senate Commerce and Insurance Committee meeting. So did a representative for Honda, which has a pair of plants in North Carolina. If there's to be an opt-out in the dealer franchise system, it shouldn't just apply to Tesla, Jones said.
The bill would apply only to Tesla for now, though it doesn't mention the company by name and other companies could eventually fit the legislative language. The legislation builds an exception into the state's prohibition on manufacturer-run dealerships, but only for companies that sell vehicles that are solely electric.
Tesla has refused to sell through third-party dealers, a requirement in many states, saying it wants to deal directly with consumers. This bill would limit the company to six locations in North Carolina and forbid it from selling other car brands or used cars, other than those accepted as trade-ins.
The new bill language was introduced Wednesday in committee, but not voted on. More committee discussion is expected before a vote.
"We think it's a limited exception," North Carolina Automobile Dealers Association general counsel John Policastro said. "It still maintains the integrity, as much as possible, of the franchise system."
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