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N&O: More Tesla dealerships could be coming to NC under Senate bill

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P3D+ owner
Apr 5, 2012
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Durham, NC
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.

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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TexasEV

Well-Known Member
Jun 5, 2013
7,642
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Austin, TX
The auto dealer cartel in North Carolina must really be running scared if they agreed to this. Now watch GM come in and try to get the legislature to reduce the number of locations as they did in Maryland.
 

TexasEV

Well-Known Member
Jun 5, 2013
7,642
8,471
Austin, TX
GM (through the auto manufacturers lobby) actually said having to sell through franchised dealers puts them at a disadvantage. Usually they use a euphemism such as wanting a "level playing field". This is the first time I've seen them say it's a disadvantage having to go through dealers:
http://www.bizjournals.com/triangle/news/2017/06/22/tesla-bill-stalls-in-north-carolina-senate.html
Of course NADA and the state auto dealer cartels are always telling us the advantages of the dealer model. I wonder what they think about this statement. Food fight!

If the manufactuers feel their dealers put them at a disadvantage, it seems that is something they need to work out with their dealers. I don't know why the state should be involved.
 
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SageBrush

REJECT Fascism
May 7, 2015
12,221
15,131
New Mexico
If the manufactuers feel their dealers put them at a disadvantage, it seems that is something they need to work out with their dealers. I don't know why the state should be involved.
I don't know why Tesla should be involved.

As for GM and the others, they benefited greatly from the dealership model in years past , one they were happy to set up when it suit them. So I'm really, truly sorry they don't find it helpful anymore. No, really. My heart bleeds for them.
 
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stopcrazypp

Well-Known Member
Dec 8, 2007
10,000
4,918
GM (through the auto manufacturers lobby) actually said having to sell through franchised dealers puts them at a disadvantage. Usually they use a euphemism such as wanting a "level playing field". This is the first time I've seen them say it's a disadvantage having to go through dealers:
http://www.bizjournals.com/triangle/news/2017/06/22/tesla-bill-stalls-in-north-carolina-senate.html
Of course NADA and the state auto dealer cartels are always telling us the advantages of the dealer model. I wonder what they think about this statement. Food fight!

If the manufactuers feel their dealers put them at a disadvantage, it seems that is something they need to work out with their dealers. I don't know why the state should be involved.
They used the same language years ago:
GM CEO Mary Barra on Tesla: 'We just want a level playing field'

What they gloss over is that they already had the cards stacked for them (the franchise dealership network helped establish their brand). The other way to "level the playing field" is to work with Tesla to relax such laws. But instead they choose to lobby to trip Tesla up (and is the only automaker doing so).
 

ecarfan

Well-Known Member
Sep 21, 2013
19,198
13,850
West Vancouver, British Columbia
Please note that Tesla does not have "dealerships". A dealership buys cars from a manufacturer and then sells them to the public. The manufacturer does not sell direct to the public. A dealership is an intermediary between the manufacturer and the marketplace.

Tesla sells direct. Tesla has "showrooms" where cars can be purchased (or they can be purchased online) and service centers.


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.
 

TexasEV

Well-Known Member
Jun 5, 2013
7,642
8,471
Austin, TX
  • Informative
Reactions: Drucifer

gfb107

Member
Sep 3, 2015
209
99
Cary, NC
I'm not positive, but I don't think there's any laws preventing Tesla from opening more Service Centers in NC. There's only laws that prevent more Showrooms, which this bill would relax a bit.
 

muleferg

Active Member
Dec 15, 2013
1,454
745
North Wilkesboro, NC
My Vote:cool:
 

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