Tesla’s business model of selling cars directly to customers has been facing opposition in Indiana, and on Thursday, a state Senate committee effectively tabled a controversial bill against it, says a report from INDYSTAR.
Not considering a ban on Tesla’s sales model
The Senate Commerce and Technology Committee voted in favor of sending House Bill 1254 to a summer study committee. On Feb. 2, the House passed the same version of the bill. A version of the bill that proposes to ban manufacturers from selling cars directly to customers has already won support from Sen. Jim Buck (R-Kokomo), the committee chairman.
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Such a bill would have expired Tesla’s dealer license in 2018, thus forcing the EV maker to either adopt a franchise dealer model or stop selling its cars in Indiana altogether. The automaker opened a showroom at Fashion Mall at Keystone in Indianapolis two years ago.
Opening the committee hearing on Thursday, Buck said that Tesla supporters had been sending rude comments on the matter. Both Buck and the bill’s author, Rep. Kevin Mahan, have agreed to put the issue before a study committee. This means the legislature does not intend to take any ban on direct auto sales into consideration until at least next year.
“We look forward to participating in the upcoming summer study process where we will be able to fully air the issues of vehicle sales and consumer choice in an open and public forum,” said Todd Maron, general counsel for Tesla.
GM in support of banning direct sales
General Motors, which is in support of a ban on direct auto sales, argues that Tesla has a unique advantage in Indiana. Existing state laws impose restrictions on traditional automakers by not allowing them to open sales centers that compete with its dealerships, such as those operated by Tesla. GM issued a statement saying it will continue to work in favor of laws that impose bans on direct sales in Indiana and other states.
“GM is very pleased that we were able to elevate the issue of disparity impacting our dealer partners in Indiana, that this received as much attention as it did, and that this issue advanced as far as it did,” the statement said.