HARTFORD, CT — Tesla Motors is trying again to sell its electric vehicles directly to Connecticut consumers.
On Wednesday the Transportation Committee was considering a bill that would allow the Department of Motor Vehicles Commissioner to issue a new or used car dealer license to electric car manufacturers without a franchise agreement. The legislation, unlike in past years, doesn’t specify how many of these licenses would be allowed.
The Connecticut Automotive Retailers Association is again opposed to the legislation because they say it would create an “unfair loophole” in the franchise system and undercut consumer protections. There are 270 auto dealers across Connecticut and over the past few years they’ve been successful at getting lawmakers to maintain the current franchise system that Tesla is looking to disrupt with its business model.
Jonathan Chang, deputy counsel for Tesla, said the American company has a mission to assist the “world’s transition to sustainable energy.”
He said since its inception Tesla’s plan has always been to introduce “high-end products” that will become more affordable as technologies improve and economies of scale are achieved.
Tesla’s Roadster introduced in 2008 had a starting price of $109,000. The Model S and the Model X were then introduced with a starting price of about $71,000. Last year, the company unveiled the Model 3 with a starting price of $35,000 and that’s started to begin production later this year, Chang said.
He said if this legislation is improved Tesla will be able to double the number of electric vehicles on Connecticut’s roads in the next year or year-and-a-half.
Connecticut’s auto dealers already sell 33 versions of electric vehicles, and many of them qualify for the state’s rebate program.
Tamara Jackson, of Jackson Chevrolet in Middletown, said she would love the opportunity to be able to sell Teslas. However, the company is refusing to give franchise dealers an opportunity to do that.
“In today’s universe Tesla has mainly low volume. Their product is expensive so not everybody can enjoy that kind of purchase, so it’s not something that’s competing with our mainstream products that we’re currently selling,” Jackson said.
Chang said Connecticut is only one of four states that doesn’t allow Tesla to sell directly to consumers. He said Texas, Michigan, West Virginia, and Connecticut are the only states that prohibit Tesla from selling directly to consumers.
The 1,300 Teslas on the road in Connecticut were purchased in other states, mostly New York and Massachusetts.
“Are dealers going out of business as a result of Tesla selling direct? No, they haven’t,” Chang said.
He said their entire business model is built on direct sales and they don’t have franchise agreements in any of the other states where they are able to sell their vehicles.
Chang also said that franchise dealers steer consumers away from electric vehicles. But Jackson said that’s absolutely not true.
In 2016, national sales of the Chevy Volt increased by 61 percent, Jackson said.
“The technology is growing,” Jackson said. “People are becoming more comfortable with it.”
Unlike Tesla’s vehicles, which are solely electric, the Chevy Volt gets 50 miles on a charge, but also has a gas tank to relieve any range anxiety.
Jackson said the Connecticut CHEAPR program has boosted the electric vehicle market in the state significantly.
The Connecticut Hydrogen and Electric Automobile Purchase Rebate Program — known as “CHEAPR” — provides a cash rebate for residents, businesses, and municipalities who purchase or lease a battery electric, fuel cell, or plug-in hybrid vehicle. Teslas don’t qualify for the program because there’s a price cap of $60,000 for a vehicle.
Jackson said more than 4,000 vehicles have been sold under the CHEAPR program.
As additional products like the Chevy Bolt come to market, the number of electric vehicles franchise dealers sell will only increase, Jackson said. The Chevy Bolt is expected to carry a charge of 238 miles, which is close to the 250 mile charge Tesla’s vehicles carry.
Last year, Sen. Majority Leader Bob Duff, D-Norwalk, tried to help get a similar bill over the finish line in the state Senate, but came up short.
The bill passed the House last year, but never got called for a vote in the Senate.
Rep. Tony Guerrera, D-Rocky Hill, said he’s ready to help get the bill passed in the House, but is still uncertain about its fate in the split Senate.
