A bill designed with Tesla Motors in mind made it through the House on Thursday, paving the way for the Senate to decide if the company should be allowed to bypass auto dealers and sell its electric cars directly to Connecticut consumers.
The bill would allow the company to open up to three dealerships in the state. It passed by a vote of 116-32.
The measure narrowly applies to electric car dealerships that had a presence in the state as of January 1, 2014. Tesla established its service center and gallery in Milford in 2013.
Connecticut’s current law requires that any new vehicle be sold to a consumer by a franchise that is not owned by the manufacturer. Each dealer location must be at least 14 miles away from another dealership selling the same brand.
The bill was the subject of vocal opposition from car dealers who said Tesla should be held to the same standards as the rest of the car manufacturers. They believe the franchise system contributes significantly to the local economy and protects consumers.
But Jim Fleming, president of the Connecticut Automotive Retailers Association, acknowledged the bill’s narrow focus in a statement following the vote.
“The bill limits direct sell stores to a manufacturer that does not have franchised stores and exclusively produces zero emission electric vehicles. They will be limited to 3 retail outlets in Connecticut. Under this bill, any such stores will need to comply with existing DMV laws and DCP mandated consumer protections,” Fleming said. “This limited exemption leaves open the future possibility of direct sell stores joining the dealer franchise system if they grow to their potential. We believe this flexibility allows them to grow in their start-up phase, and if successful, to reach their full potential under a franchised dealership network.”
Diarmuid O’Connell, Vice President of Business Development for Tesla Motors, released a statement saying the move heralds new jobs, more money, and environmental prestige for the state.
“We’ve worked with the dealers association, made compromises, and now look forward to the Senate also recognizing that Tesla can bring revenue, ingenuity, and consumer choice to the state,” O’Connell said.
Elon Musk, CEO and founder of Tesla, blogged about similar legislation in New Jersey last year. He wrote that the reason they did not seek to sell their cars through dealerships was because dealers “have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none.”