Tesla Motors Inc Ready To Compromise On Direct Sales In Connecticut

Tesla stockBlomst / Pixabay

Tesla Motors offered a few compromises to make it easier for lawmakers to pass legislation allowing direct sales to Connecticut consumers this year, says a report from Mercury News. Presently, the EV manufacturer has a repair shop in Milford, but state law does not allow it to sell cars straight to consumers.

Comprising on a few points

In an email to state legislators from two lobbyists working on Tesla, it was stated, “All told, these concessions would make the bill, if it became law, the most stringent limit on Tesla in any of the 35 states they are permitted to sell in.” The email further read that fewer concessions have been endorsed by auto dealer associations in Tennessee, Maryland and Pennsylvania.

Tesla has conveyed to legislators that it is comfortable with having a limited number of sales locations in the state with a maximum of five. The EV manufacturer said it agrees to the bill limiting direct sales to only manufacturers producing electric vehicles entirely and those who don’t currently use independent franchise dealers. To bring down the impact of the legislation, Tesla said that it would agree to the language restricting direct sales to manufacturers with an established presence in Connecticut.

Dealers still doubt proposal from Tesla

James Fleming, president of the Connecticut Automotive Retailers Association, told Mercury News that Tesla’s proposal still has many shortcomings in the current auto franchise law and puts 13,000 jobs across Connecticut at risk. Fleming noted that Tesla products are likable but said its long-term implications are still not known. Connecticut franchisee laws were enacted to safeguard car dealerships from unfair competition from car manufacturers.

Fleming said it would be simpler for the existing 32 manufacturers licensed to sell vehicles in Connecticut to have a new entity and sell directly to consumers. Additionally, he made a point that large electric car manufacturers from India and China that have not yet made a mark in the market will also take advantage of the alleged loophole Tesla wants to create. Fleming believes it is better for consumers and Tesla to use the existing system of mostly family-owned dealerships to sell their cars.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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