After losing lawsuit against Tesla, New York auto dealers back legislation to block direct car sales

After losing lawsuit against Tesla, New York auto dealers back legislation to block direct car sales

New bills submitted to the New York legislature and reportedly funded by the state’s auto dealers would block Tesla from selling its electric cars in the state. If successful, the move would represent a tricky end run by auto dealers to protect their way of doing business, as Tesla is the only company that sells cars directly in the state.

Tesla’s business model of selling its electric vehicles directly has already riled auto dealer associations in several states, including New York and Massachusetts. The company is seeking dealership licenses in Virginia and Texas, but it is running up against laws that require companies to franchise their operations.

After auto dealers tried to shut down Tesla’s New York stores and service centers, the state Supreme Court ruled in favor of Tesla in April.

We’ve reached out to the New York Auto Dealer Association to hear their side of the story. In the meantime, Tesla founder Elon Musk has taken to Twitter in a call for action:

He went on to allege that the dealers are “trying to ram the bill through quickly.” As Green Car Reports notes, the New York legislature is preparing to break for summer, so the bill is coming in at the last minute. Interestingly, the Assembly’s website lists June 20 as its latest session day.

Tesla has also issued an official statement on the issue:

The bottom line for New York consumers and New York suppliers is that if this bill passes, special interests in Albany will once again have gotten their way while robbing New Yorkers of choices in the marketplace, and Tesla will be put out of business in New York. The result would be that all of Tesla’s New York employees will lose their jobs.  It means that New York-based suppliers to Tesla will lose business and New York consumers cannot buy the most advanced electric car in the world today. Banning Tesla from selling its vehicles is also a step in the wrong direction for reducing carbon vehicle emissions and the green environmental movement in New York.  With the State of New York pushing so hard to lead green innovation supporting entire agencies for energy efficiency like NYSERDA, it is absolutely defies logic to ban Tesla from selling electric cars in New York.

From the beginning, Tesla’s goal has been to catalyze the market for electric vehicles and selling through intermediaries at this stage of the company will not work.  For Auto Dealer Associations to claim that restricting competition is in the best interests of the public is wrong and defies obvious common sense.  If we are kept out of New York, it forestalls progress and defeats innovation.

Tesla has created jobs in New York at both its stores and service centers and the sales of its vehicles go into supporting the local economy. Tesla remains committed to bringing electric vehicle technology and its customer focused sales and ownership experience to New York consumers, while complying with all local and state laws.

Tesla’s renewed fight against auto dealers comes on the heels of the company announcing an impressive 90-second battery swap service option that will allow Model S owners to make a quick pit stop instead of waiting to recharge their batteries.

At the event, Musk billed a demonstration of the technology as a “title fight” between electric vehicles and gasoline cars. With his typical showmanship, he showed a battery swap on two Tesla cars in the time it took for someone to fill a tank of gasoline.

Image credit: Joe Raedle / Getty Images

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