The Connecticut Automotive Retailers Association is going on the offensive against the latest legislative effort to allow Tesla Motors sell their vehicles directly to consumers.
In anticipation of today’s public hearing on the bill, the car retailers — along with representatives from some of the largest car manufacturers in the world — stood on the north steps of the state Capitol on Tuesday to tell lawmakers, “if it ain’t broke, don’t fix it.”
The legislation car dealers oppose would allow an electric car company like Tesla to open three retail locations in the state. A similar bill cleared the House of Representatives last year, but stalled in the Senate.
James Fleming, president of the Connecticut Automotive Retailers Association, said the franchise system works and it’s competitive.
“It understands the local market. It benefits consumers in price, selection, service and it’s committed locally in the communities where the dealerships are located,” Fleming said. “Tesla has never made a profit in that eight-year time period.”
Fleming also noted that the electric car maker has relied heavily on government subsidies to fund its operation.
Tesla Motors told investors in February that it expects to be profitable in 2016, as sales of its Model S sedan and Model X SUV pick up steam.
Jim Chen, vice president of regulatory affairs and deputy counsel for Tesla, said their business model is straightforward.
“We provide consumers with an opportunity to learn about the benefits of electric drive without high pressure sales tactics,” Chen said. “We have no independent franchised dealers anywhere in the world, including none in the U.S.”
Elon Musk, CEO and founder of Tesla, wrote in a blog post in 2012 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.”
But Fleming said he hopes Tesla will revise its request to the Connecticut General Assembly and will agree to sell its vehicles through dealerships. There are currently 32 manufacturers whose electric vehicles are sold in Connecticut by 260 of the state’s 270 dealerships.
Senate Majority Leader Bob Duff, D-Norwalk, who renewed the push for the legislation this year, said it’s up to the lawmakers to decide if they want to adapt to a changing economy and approve the legislation. He said he understands that car dealers feel threatened, but “I feel that competition is a good thing.”
Landon Fulmore, vice president of state affairs at the Alliance of Automobile Manufacturers, said all they want is one set of regulations for everybody competing in the marketplace.
“We don’t need carveouts. We don’t need loopholes. We need to make sure everybody plays by the same rules,” Fulmore said. “I think that’s important in our industry. I think that’s important in any industry that wants to do business in the state of Connecticut.”
The public hearing on the bill starts at 10:30 a.m. in hearing room 2E at the Legislative Office Building in Hartford.
