Arizona Quickly Changes Position On Tesla Direct Sales – Giga Factory Anyone?

MAR 20 2014 BY JAY COLE 31

It’s amazing what the prospect of a $5 billion dollar factory with thousands of new jobs up for grabs will do for a state’s opinion of your business model.

Teslaa's Giga Factory Will Be Located in One Of These 4 States

Tesla’s Giga Factory Will Be Located in One Of These 4 States

…at least that is the case when it comes to Arizona and Tesla’s new “Giga factory

Arizona is already one of four Tesla pre-selected states in the running for the super factory  (the other 3 are New Mexico, Nevada and Texas); the only problem is that you can’t actually buy a Tesla in the state because legally the California company has to have a traditional dealership model in place before they are permitted.

What to do?

Enter House Bill 2323; which will now allow automakers to sell directly to customers in Arizona; provided they only make plug-in electric vehicles and also operate a service center within state lines.

In a very opposite-to-what-happened-in-New-Jersey‘ … but not really move; the bill originally had nothing to do with automotive sales at all, and was just amended on Wednesday by Sen. majority leader John McComish to include the Tesla provision before quickly passing 3-2.

The final ballot, seen as a technicality, heads to the full Senate shortly after a routine review in another committee.

Recently A Surprise Change In New Jersey Saw Tesla Banned From The State

Recently A Surprise Change In New Jersey Saw Tesla Banned From The State

Naturally, the other auto makers are very pleased (sarcasm):

“Tesla is asking for a special exemption for them to have a separate set of rules for their electric cars,” Mike Gardner, a lobbyist for the Alliance of Automobile Manufacturers, told the Senate Commerce, Energy and Military Committee. as reported by AZCentral “What we’re opposed to is allowing one of our competitors to go around the dealer network and sell directly to consumers. We think we should all be treated the same.”

For what it is worth, lawmakers say this about-face has nothing to do with the prospect of having Tesla’s “Giga factory” in their state (which we all completely take at face value of course).

“I don’t want to send a message, even though this is not a quid pro quo.  I want the message from our state to be that we welcome the opportunity to work with large successful companies with this size market cap.” – Senator Bob Worsley, Rep-Mesa.

Lawmakers Say Being 1 of 4 States In The Running For Tesla's New $5 Billion Dollar "Giga Factory" Had Nothing To Do With Last Minute House Bill To Allow The Auto Maker To Sell In Arizona

Lawmakers Say Being 1 of 4 States In The Running For Tesla’s New $5 Billion Dollar “Giga Factory” Had Nothing To Do With Last Minute House Bill To Allow The Auto Maker To Sell In Arizona

The Senate leader said it was a “pre-emptive” strike against a law (established in 2000) that could lead to the outright banning of Tesla in the state – customer’s can currently only browse at a Tesla boutique in Scottsdale, Arizona, but still order online.

“What has happened…is that in some states, they are moving to outlaw that kind of operation. But I think we should be about opportunities for innovation rather than stifling innovation.”

Your move New Mexico, Nevada and Texas.


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31 Comments on "Arizona Quickly Changes Position On Tesla Direct Sales – Giga Factory Anyone?"

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Anon, io

My opposition to the other chart was based on the wording on the map. The map said: “Tesla Storefronts banned”. It should have said “Direct sales Banned” (in Arizona).

Anyway, this new bill is very much like medicinal marijuana in my state of Az. Even though our state senate is very conservative, if it looks like there is money to be made, some exceptions can be made (in the name of free capitalistic spirit …LOL.)

NP. 🙂

So what happens when/if this bill gets passed and then Tesla says.. “meh.. were going to build in New Mexico”. LOL

Maybe Tesla should keep pushing this for all it’s worth, to get as many laws changed as possible, before settling on a state for the Gigafactory.

Maybe they should add New Jersey as a possibility…

It’s just a matter of time before ALL states allow Tesla to sell their car directly. The auto dealers are just going to make it very tough.

It was a brilliant move by Musk to publicize the finalist states. Two of which needed legislation passed for the stores, was not a coincidence.

Even if the laws don’t get passed in Texas or Arizona, he will have gotten their attention.

Looks like NJ may change it’s law in favor of Tesla now.

Nice to see Democrats trying to fix the corrupt Governor’s latest fiasco. Hope it’s soon.

Yeah, and the fix is to do what the “corrupt Governor” suggested. From the article:

“Greenwald is one of several Democrats in the state Legislature who have indicated they would be willing to put forth a bill that would change the law.”

I wonder why these beloved Democrat saviors didn’t do that a year ago.

NJ doesn’t need to change the law, because the law doesn’t actually prevent the direct sales of cars to the public. It does prevent franchisers from selling direct, but Tesla is not and has never been a franchiser.

The problem with the NJ coverage is that it too often suggests that Tesla was getting some special treatment. The change by the regulatory board was not in compliance with the law and was clearly at the behest of auto dealers.

“Special Treatment”, is conservative spin.

Dr. Kenneth Noisewater

Unless New Mexico comes up with some massive incentives, it’s going to be Nevada.

Agreed. I put my bet on Nevada.

Just FYI, Texas’ legislature doesn’t convene for another 9 months. Might put us a little behind the curve in getting such a bill passed in a timely manner.

That’s a sad story. Perhaps Texas (and other states who consider it) will learn their lesson for the future.

They better not take too long.. or this could be the case.

I have always liked that commercial. Soo funny!

Hahahahaha! Of COURSE it’s got nothin’ to do with the Giga factory. (wink wink)

Timing is everything. Hey AZ. Legislature, as long as you’re trying to make an impression; how about lowering the tags & registration for vehicles with plugs like EREV & PHEV. After-all, electricity should be considered as an AF for them just like it is for BEVs. We drive mostly on electrons around Tucson yet pay a very high amount for license & registration for our Chevy Volt, WTF? BTW, most of the roads in central Tucson need to be totally repaved because they are in such bad condition JMHO. Meanwhile, there is a Tesla P85 as 1 of the top raffle prizes for Tucson Medical Center!

”What we’re opposed to is allowing one of our competitors to go around the dealer network and sell directly to consumers. We think we should all be treated the same.”

What a shill!

Nobody ever forced GM and Ford to use a dealer network; that was their own decision.
Once made, it can not be remade, unless every one of their dealers decides to close their businesses.

If everyone should be treated the same, then Tesla Motors must also be allowed to make their own decision and have it accepted and not banned.

Right on!

So you are saying Tessssslas best strategy is to place New Jersey, Texas and New York on the list of possible gigafactory sites, then drag out the selection process for as long as possible… hummmm……

This decision is important mainly as a precedent. Secondly: by limiting the dispensation of selling only plug in vehicles directly to consumers, they are blunting one of the main criticism of the more established car makers who use the dealership model.
i.e.Dealers claim direct sales will be unfair to them, but if it only allows that exception for plug in cars, it limits the damage they are likely to suffer and therefore the basis for the argument that it is unfair.
Governments can also use the argument that ev’s are less damaging to the environment, and therefore are eligible for special treatment, for the overall good of society.
Fighting monopolies is never easy but the fact that they are monopolies give those fighting them some ammunition.

I think the bill should be written so that all plug-ins can be sold directly by the manufacturer, regardless of what other vehicles they make. That means Ford, Toyota, GM, etc. could sell their plug-in models directly. This would allow them to control the consumer environment, and if they make it a pleasing one, would help the adoption of plug-ins over traditional gassers.

You can open Tesla stores and service in the Indian reservations next to Phoenix and Scottsdale. The dealership cartel and politicians don’t have power there.

Interesting thought. They could do the same in Oklahoma — just over the border from Texas.

That would be worth checking into. If you can have Casinos and sell cigarettes w/no sales tax, why not Teslas w/no sales tax. You could add them to existing Casinos for more traffic. Have Solar City negotiate a deal for PV power on the Res. It that works, help the Native Americans transition the 4 Corners coal power plant over to PV & wind as well.

Awesome idea. 🙂 I like the concept of Native Americans selling clean tech to whites, and switching to locally harvested renewables for power. 🙂

At least that could be a viable threat to use to prevent unfavorable rulings, though practicality may be lacking unless reservations are located very close to high population areas.

Money Talks…

Why bother…its pretty much a given that it will be Nevada. It will be spun differently but the main reason; a pay back to Harry Reid (D-Nevada).
In return those nagging NHTSA issues, or for that matter any possible SEC scrutiny, will be a thing of the past.