Tesla’s Battle With Store-Blocking Legislation in Minnesota Far From Over (UPDATE #2)

5 years ago by Eric Loveday 6

Typical Tesla Motors Store

Typical Tesla Motors Store

The last time we broached the subject of Tesla Motors battling store-blocking legislation in Minnesota  it seemed Tesla won (note the Tweet below from Tesla CEO Elon Musk), but this one ain’t over.musk tweet

Yes, the store-blocking bill was defeated in the Senate, but it’s still active in the Minnesota House.  On Wednesday, a House committee will hear testimony from both sides.  The Minnesota Automotive Dealers Association (MADA) will present its case against vehicle manufacturers operating dealerships (Tesla calls them “stores”) and Tesla will argue that without the ability to operate its own stores, the automaker’s future (at least in Minnesota) is doubtful.

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Scott Lambert, executive vice president of MADA, stated:

“We thought it was a simple clarification bill.  We’re surprised to have this much controversy surrounding it.”

Well, when the fate and success of Tesla Motors is on the line, there’s sure to be controversy.

Quoting Tesla spokeswoman Shanna Hendriks:

“We’re going to continue to work to make our case.”

Tesla seeks to amend the bill, which if passed would not allow a vehicle manufacturer to operate a dealership. Under Minnesota’s current law, an automaker is prohibited from competing against a same-brand franchised dealership.   There’s a distinct difference between the state’s existing law and the proposed legislation under consideration in the House.  If the proposed legislation passes, then Tesla will be forbidden from opening a store in Minnesota.

UPDATE: Tesla wins…The Minnesota Automobile Dealers Association has requested that the store-blocking legislation be removed from the bill before the House committee meets on Wednesday.  Scott Lambert, executive vice president of the Minnesota Automotive Dealers Association had this to say:

“It seemed the only way to do it was to grant Tesla an exemption to the law, and we’re not willing to do that.”

UPDATE 2: Tesla’s Diarmuid O’Connell, vice president of development, has commented on the situation.

“I don’t chalk up wins and losses.  It sounds trite, but it’s true.  I’m really glad we can enter the Minnesota market with a product that I think is very well suited to them.”

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6 responses to "Tesla’s Battle With Store-Blocking Legislation in Minnesota Far From Over (UPDATE #2)"

  1. Nelson says:

    Dealer Association should stop harassing Tesla and start demanding their partnering auto manufactures to make a Model S competitor.

    NPNS!
    Volt#671

  2. David Murray says:

    I don’t really understand how they can even call them stores or dealerships. After all, they don’t sell cars. They are more like large 3-dimensional advertisements, with paid advertisers on staff.

  3. evnow says:

    I don’t see how any law that MN passes (if it does) holds in any court. This is purely anti-competitive. Just because some dealers invested in a dealership, they can’t argue Tesla shouldn’t sell its cars in MN !

    1. Roy_H says:

      They’re not arguing that Tesla shouldn’t sell cars in MN, just that Tesla should be forced to sell through their dealerships so they can profit. They want the law written to put more money in their pocket, and have no case that this is better for the consumer.

  4. Roy_H says:

    “We thought it was a simple clarification bill. We’re surprised to have this much controversy surrounding it.”

    What a load of BS! They want the law changed, it is quite clear now that Tesla IS allowed to open their own dealerships. How do you define clarification as changing from Tesla being allowed to open dealerships to NOT being allowed to open dealerships.

  5. Roy_H says:

    Scott Lambert’s quote “It seemed the only way to do it was to grant Tesla an exemption to the law, and we’re not willing to do that.” was confusing at first, then I realized that had their proposed law change been approved, it would only apply to new companies in the future. They wouldn’t have been able to make the law retro-active to before Tesla opened up their store.

    The Minnesota Automotive Dealers Association realized they had no case to keep out the competition, so they backed down. It is unfortunate that it is only considered good business to lobby politicians and try to change laws to one’s own advantage, there is no sense of fair play.