Another rumble is brewing around Tesla car sales in Connecticut.
Industry associations representing automobile dealers and manufacturers came out Tuesday against a proposal that would allow Tesla to sell its high-end electric cars directly to Connecticut consumers, effectively bypassing dealership franchises.
The Connecticut Automotive Retailers Association (CARA) and the Alliance of Automobile Manufacturers – which represents a dozen major manufacturers – said proposed Senate Bill 3 would create an unfair playing field for Tesla.
Their press conference came one day before a public hearing on the bill scheduled by the legislature’s Transportation Committee.
“Granting Tesla a corporate loophole will circumvent longstanding consumer protections and jeopardize local businesses that have operated under these laws in good faith for over 40 years,” CARA President Jim Fleming said in a statement Tuesday.
Asked for comment, James Chen, Tesla’s deputy general counsel and vice president of regulatory affairs, portrayed the auto dealers and manufacturers as “entrenched interests” trying to block innovation.
Chen said passage of the bill would mean economic development in Connecticut.
“This bill will foster economic activity and increased jobs for Connecticut residents without harm to any established business,” Chen said. “No independent dealer has ever had to lay off employees or close its doors in the over 20 states where we have a sales location because of Tesla’s presence.”
Tesla said in November that allowing it to open showrooms in Connecticut would generate (per showroom) as many as 25 jobs, as much as $10 million in direct economic impact, and an additional approximately $1.7 million in sales tax revenue.
Auto dealers have countered that the franchise model offers greater consumer protections.
Tesla pushed for a similar bill last summer, but the legislation died in the House, despite a compromise brokered with CARA that would have limited Tesla to three sales locations in the state.
The legislation, which doesn’t mention Tesla by name, would permit the state to issue a dealer license to any company that manufactures solely electric vehicles. That means electric vehicle manufacturers like Chevy and General Motors wouldn’t be able to sell electric cars directly to customers, if the bill passes as currently written.
The CARA coalition plans to testify at Wednesday’s hearing, and will also be bringing several electric vehicles, including those made by Nissan, Ford, BMW and Mercedes, to provide test runs to legislators.
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