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article imageTesla vs Dealers: North Carolina bill may ban state Tesla sales

By Yukio Strachan     May 27, 2013 in Technology
Raleigh - Tesla Motors is fighting a bill backed by North Carolina’s 7,000 auto dealers that would make it illegal for the car manufacturer to sell its award-winning electric cars through its Internet-based model.
Senate bill 327, which passed the state Senate in a unanimous vote on May 13, would prevent car manufacturers from "using a computer or other communications facilities, hardware, or equipment" to sell or lease a car to anyone in the state, according to the North Carolina state legislature website.
The bill now heads to the House.
If approved, the bill would render Tesla unable to legally sell cars in the state, ABC news reported. Since the company bypasses traditional dealerships by selling directly to consumers and allows buyers to place their orders online, it would not meet the state's definition of a "dealer."
The California automaker has stepped up its advocacy in North Carolina and is planning to sit down with the North Carolina Automobile Dealers Association ahead of state House meetings, the Associated Press reported Sunday.
The AP reported on Saturday that some have suggested a compromise that would allow Tesla a certain quota of direct sales without going through franchised dealers. But that isn't fair to other manufacturers, said Sen. Tom Apodaca, R- Henderson and the bill's sponsor, the AP writes:
Apodaca received a state-maximum $8,000 in contributions from the 7,000-member NCADA in 2012. He noted steady contributions from the industry date back years, and he's a top Republican with a pro-business reputation.
"You can't cut out a category for a brand new company when you've got Kia, Hyundai -- they're in here full blast -- (but) Maserati, Ferrari (and) Rolls-Royce?" he said, according to the AP. "They have dealer presence in North Carolina, and I know they probably don't sell 80 cars."
Tesla Motors all-electric Model S sedan
Tesla Motors all-electric Model S sedan
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More than 80 Tesla cars have been sold to North Carolina residents, and about 60 more orders are being processed, said James Chen, Tesla’s director of public policy and associate general counsel to the Charlotte Observer.
“This is new technology – it’s a computer on wheels,” Chen said. “When we get to 200,000, or 300,000, or 400,000 vehicles a year, then maybe like Apple we will have a walled garden, and also work through independent dealerships.”
Jerry Maccioli, a Raleigh anesthesiologist, paid more than $100,000 for a Tesla in January without even a taking a test drive, The Observer writes.
Maccioli derides the legislation as the “Save the Car Dealers Association Bill.”
“I’m an informed consumer, I did my research, I made my choice,” Maccioli told the North Carolina newspaper. “Why should I have to go through a dealer?”
Targeting Tesla
North Carolina joins efforts from auto dealers in other states to force Tesla to play by the existing rules, the News & Observer reported. As the Associated Press points out, Colorado was the first state to take action against the manufacturer's stores, passing legislation in 2010 that halts their expansion.
Since then, Minnesota lawmakers unsuccessfully pushed for a similar measure, but dealers there are still threatening to sue, according to the Star-Tribune. The Massachusetts State Automobile Dealer’s Association already tried that, when they sued to shut down a Tesla showroom in 2012. They lost, The Daily Beast reported; ditto, in New York. In Virginia, a judge recently rejected Tesla's request for an exception to laws that prevent manufacturers from operating dealerships in most cases, the AP said.
North Carolina is the latest battleground for the company.
California-based Tesla sells Motor Trend's car of the year for 2013: the Model S luxury sports sedan; the "world's first premium electric sedan." Its Model S, priced at $49,900 to $97,900, based on battery options and upgrades, also earned a rare near-perfect rating from Consumer Reports on May 9.
More about Tesla motors, North carolina, North Carolina Automobile Dealers Association, telsa ban, Senate bill 327
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