Tesla sales bill in Utah sputters to halt after multiple changes (updated)


Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

Tesla continues to fight with franchised dealers in multiple states over its practice of selling electric cars directly to customers.

One of those battleground states is Utah, where the debate recently took an interesting turn.

A proposed bill initially aimed at allowing Tesla to employ its direct-sales model in the Beehive State stalled, after even Tesla itself came out against it.

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The bill died after more than a year of negotiations between Utah's franchised car dealers, Tesla, and lawmakers, according to The Salt Lake Tribune.

Like several other states, Utah has a decades-old franchise law that prevents automakers from selling cars directly to customers.

Representative Kim Coleman (R) attempted to draft legislation that would allow Tesla to sell cars in the state, and worked with both the automaker and dealers to craft the bill.

Tesla Store opening in Westfield Mall, London, Oct 2013

Tesla Store opening in Westfield Mall, London, Oct 2013

Enlarge Photo
But when Tesla saw the final version of this bill, HB 384, it felt the legislation would do more harm than good.

The bill would have granted Tesla the ability to sell cars directly to customers in Utah, but the company took issue with several restrictions it claims were inserted at the behest of franchised car dealers.

These include provisions that would have required Tesla to deliver cars directly to customers rather than keep inventory anywhere it wanted in the state, and from letting customers sign paperwork in its retail stores.

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Tesla subsequently mobilized supporters to kill the bill, and at least seems to have accomplished that mission, for now.

Coleman said she plans to continue "studying" the issue of direct sales over the next several months.

Tesla, meanwhile, has a case pending in the Utah Supreme Court that it hopes will win it the right to sell cars in the state on its terms.

Tesla Store opening in Westfield Mall, London, Oct 2013

Tesla Store opening in Westfield Mall, London, Oct 2013

Enlarge Photo
The Utah development comes shortly after a skirmish in Indiana.

Tesla is currently allowed to sell cars in Indiana, but a recently-introduced bill would have curtailed that practice by limiting direct-sales licenses for carmakers to 30 months.

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The bill was authored by Representative Kevin Mahan (R), but Tesla accused General Motors of being involved with its creation as well.

While it passed the Indiana House by a significant margin, the bill was effectively tabled by the Senate, keeping Tesla's Hoosier operations safe for now.

UPDATE: After this article was published, Tesla Motors sent the following statement:

Tesla is grateful that HB 384 was sent to interim study rather than passed. HB 384 would have allowed Tesla to be licensed in Utah, but only with severe restrictions that would have harmed our Utah customers.

These restrictions were inserted into the bill at the request of our competitors, who would like to dictate the terms by which our customers can be served.

Because this bill was not passed, Tesla will be able to move forward with our pending lawsuit before the Utah Supreme Court and hopefully vindicate our right to serve our Utah customers without restriction.

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