New York auto dealers are trying an entirely new tactic in their fight against Tesla Motors Inc (NASDAQ:TSLA)’s direct to consumer sales model. They seem to be trying to make it illegal to register vehicles that were not bought from an independent third party, according to CBS 6 News Albany and Green Car Reports.
As the only dealer which sells its vehicles directly to consumers, the bills are a direct stab at Tesla Motors Inc (NASDAQ:TSLA). In fact, they are so narrowly written, that Tesla is undoubtedly the target of the bills. Tesla Motors Inc (NASDAQ:TSLA) has been going around and around with auto dealers in various states. It has won some of those battles and lost others so far.
New York Bills Against Tesla’s Vehicles
Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk took to his Twitter account once again, this time calling attention to the two new bills. He said dealers in New York are “trying to ram the bill thru quickly while no one is looking.” He also urges Tesla owners and fans to call their state representatives about the bills.
Just heard that NY auto dealers are sneaking through a bill to shut down Tesla in NY. Please call your state senator!
— Elon Musk (@elonmusk) June 21, 2013
The automaker sets up showrooms which enable consumers to view its vehicles, ask questions and test drive them. Those who want to purchase the Model S then go home and order it off the Tesla website. There’s no haggling because the automaker sets the price, and it’s the same price for everyone.
New York Bills Against Tesla's Sales Model
A quick glance at the two bills shows that they aim to amend New York’s vehicle and traffic law. Green Car Reports’ John Voelcker reports that they try to do this by prohibiting the state from either renewing or issuing registration of any dealership in which the automaker has a controlling interest, but only if the registration was issued prior to July 1, 2006. He says that the bills seem to allow such stores to be temporarily registered for up to a year.
One of the items in the two bills that Musk pointed out in his tweets was a referenced to the “franchisor.” He has argued recently that Tesla Motors Inc (NASDAQ:TSLA) is not a franchisor, and thus is not subject to franchise laws.
The Street’s Chris Ciaccia also posted Tesla’s official response to the two bills that are under review in the New York Legislature. The company says that if its stores in New York go out of business, the jobs it created will disappear. It also says that Tesla’s suppliers who are in New York will lose business and that New York consumers will have fewer choices. In addition, the company points to initiatives in New York that are pushing for green innovation, saying that it “defies logic to ban Tesla from selling electric cars in New York.”
Petition In Favor Of Tesla Motors
On Tesla Motors Inc (NASDAQ:TSLA)’s forums, a loyal fan of the company posted a petition urging the White House to step into the fray over this issue. The petition says that states shouldn’t be allowed to prevent Tesla from selling its vehicles directly to consumers. It says that state legislators are “trying to unfairly protect automobile dealers in their states from competition” and that “Tesla is providing competition, which is good for consumers.”
As of this writing, the petition had fewer than 600 signatures. It must have at least 100,000 signatures by July 5 in order to be sent to the White House.