With support from a surprising industry, state legislators on Monday jump-started a stalled bill that would let Tesla Motors continue to sell its high-end electric cars directly to Georgians.
A bill once seen as a long-shot now is backed by the powerful Georgia Automobile Dealers Association, which had been trying to halt Tesla and its no-dealer business model in the state.
GADA president Bill Morie didn't disclose during a House Motor Vehicles Committee hearing what led to the flip and helped win the committee's approval of House Bill 393 on Monday. He didn't immediately return a reporter's call for comment.
One change sought by the dealers was to alter the definition of a “new motor vehicle,” raising questions about whether it might eliminate a loophole in existing law that could have paved the way for not only Tesla but other car makers to sell new vehicles without dealer involvement.
State Rep. Chuck Martin, R-Alpharetta, who sponsored the legislation, said of the changes GADA asked for: “I’m trying to ascertain the overall impact.”
He said he will meet with legislative counsel to “see what that change in the definition does” before further action is taken on the bill, which is not yet scheduled for a vote in the full House..
Georgia law generally was designed to prevent vehicle manufacturers from selling direct to consumers, except for up to 150 custom-made vehicles a year. The law was set up in part to prevent car makers from competing against their own dealers.
But California-based Tesla never had franchise dealers. It sells direct to consumers in Georgia online and through its three company-owned stores in metro Atlanta.
State law relating to franchise agreements between new car dealers and automakers defines a “new motor vehicle,” in part, as one “which as been sold to a dealer.” Tesla has argued the law didn’t apply to it in part because it has never sold vehicles to dealers.
Auto dealers say the dealer system gives added protections for consumers, such as helping to deal with manufacturer recalls.
Tesla has faced battles in other states where dealers have fought the company’s business model.
Tesla’s Model S was recently ranked by Consumer Reports as the top rated new vehicle. The base model is priced at about $70,000, but souped up versions can go for more than $120,000. Tesla said last year it sold Georgians nearly 500 cars, most via online orders, which it said shouldn’t be included in the state’s 150-vehicle cap.
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