Posted by 08 May 2018
If you live in Connecticut and want to buy a Tesla, you have to travel to a neighboring state. Connecticut law mandates that new cars can only be sold through franchises, but Tesla sells their cars directly to consumers. Legislators are considering a bill that would change the way cars can be sold in Connecticut, but it has garnered fierce opposition from existing franchise owners.
For decades, Connecticut has prohibited automobile manufacturers from selling vehicles directly to people who want to buy them. Instead, the state mandates that car sales must be made through independent franchises. This law is similar to laws that all 50 states passed to protect independent vehicle dealers from what was perceived as unfair competition from automobile manufacturers. Lawmakers at the time saw manufacturers as having too much power to undersell or coerce independent dealers, so passed laws that prohibited these manufacturers from selling directly to the public.
Tesla does not operate its sales in the same was as other automobile companies, however. It contends that independent dealers will not prioritize sales of its cars, so it wants the ability to market them directly to people who are interested in buying them. The company has been working in states around the country to change laws that prohibit it from making sales in this way. Connecticut consumers can buy cars from Tesla dealerships in New York or Massachusetts, and some do. Tesla contends that Connecticut is losing out on tax revenue by banning the car’s sale in the state.
Franchise owners say that if legislators change the law, it will lead to an un-level playing field for them. They argue that Tesla dealerships have fewer employees and lower overhead, so they will have an unfair advantage. They also argue that jobs will be lost at franchises if the state allows for manufacturers like Tesla to sell directly to consumers.
Legislators have been debating this issue for four years in Connecticut. There have been attempts to find a compromise between dealers and Tesla, but so far the two sides cannot come to a consensus. It remains to be seen if this will be the year that lawmakers break through the impasse and allow Tesla’s cars to be sold in the state.
Do you think that state laws should prohibit Tesla from being sold directly to consumers? Or do you think it is a good idea to have laws that mandate cars be sold through independent franchises?