Senate Bill To Open North Carolina For More Tesla Stores (Update – Delayed)
JUN 23 2017 BY STEVEN LOVEDAY
In the coming days, the North Carolina Senate will vote on a bill that opens the door for Tesla to open additional stores.
In North Carolina, along with a handful of other states, automakers simply aren’t allowed to sell their own cars. The reason behind this is that it may be unfair for a company like Ford to open its own company-run dealership, which would compete against already established franchised dealerships.
Tesla’s argument is that it can’t compete against itself, since it has never had any franchised dealerships. Additionally, Tesla Vice President Diarmuid O’Connell told senators that direct sales is really the only way to successfully handle the electric car market. He also explained that adding additional Tesla stores in the state will lead to a $50 million investment by the automaker, and create hundreds of jobs.
Surprisingly, the North Carolina Automobile Dealers Association is supporting the bill. Tesla previously opened a store in Raleigh without conflict. However, when the company tried to open a second store in Charlotte, other dealers objected. The organization sees the new bill as a fair compromise. Lobbyist for the association, John Policastro, admitted:
“We think it’s very important for consumer protection that the (dealership) system is in place. The concept here is a limited exception.”
Update (June 25th): apparently the automakers themselves were not fond of this bill and stepped in to apply some pressure – for now, the bill is on hold, but could return by the end of the current session.
WRAL reports (via Electrek):
“In the General Assembly, lobbyists for automobile dealers and manufacturers, who were at odds over the bill, said they expect it has been shelved for the rest of this waning legislative session. Sen. Trudy Wade, R-Guilford, who co-chairs the Senate Committee on Commerce and Insurance, said there were just too many questions about the bill to move forward.”
Basically, the Tesla bill (which actually makes no specific mention of the Silicon Valley automaker) limits manufacturer-owned dealerships to only electric vehicle automakers, and other automakers that have never used franchised dealerships. Unfortunately, it further states that the automakers could only sell used vehicles, and would be limited to six total locations. It’s not a wonder that the N.C. Automobile Dealers Association thinks that this is a “fair” bill.
Despite the fact that the local dealers are on board with the pending legislation, automakers have already gone to bat against it. Lobbyists for the Alliance of Automobile Manufacturers and Honda are disputing the bill. They believe that it makes an unfair exception for Tesla, and they don’t support the direct sales model. Davis Horne, a lobbyist for Honda said:
“It is a dramatic expansion in the law.We don’t object to the Tesla settlement in principle, but this bill goes far beyond that.”
Henry Jones, lobbying in support of the Alliance of Automobile Manufacturers, asserts that the bill doesn’t give similar options to traditional automakers for the sale of their electric vehicles. He argued:
“My clients also sell electric vehicles. We should not be picking winners and losers here.”
One can only assume that if this bill passes, and traditional automakers actually opt to establish independent stand-alone dealerships specifically for selling their electric models, it would be allowed through a careful management of wording and specifics. Although, as far as we can tell, at this point there haven’t been traditional automakers lobbying for direct sales of their electric only lineups. It surely wouldn’t be a bad thing, since it has been shown that many franchised dealerships aren’t doing much to push EVs.
If the bill passes the Senate, it will go immediately to the House for approval.