Georgia auto dealers convinced legislators to freeze a bill that would have let Tesla Motors continue to sell its highly rated electric cars direct to Georgians without going through independent auto dealers.
A subcommittee of the House Motor Vehicles Committee voted Wednesday to table House Bill 393, a move representatives of dealers who opposed the bill said will allow time to try to work out an agreement with bill supporters.
The bill’s main sponsor interpreted the move differently.
“They want to kill the bill this year,” said Chuck Martin, a Republican from Alpharetta.
With the session winding down, Martin said options for getting the law changed in this, his second year attempting to do so, are shrinking.
“It’s a terrible statement for the free market system in Georgia,” he said.
Georgia law generally prevents vehicle manufacturers from selling direct to consumers, except for up to 150 custom-made vehicles a year. Tesla, whose Model S was recently rated the number one new car by Consumer Reports, sells direct to consumers, skipping the independent dealer model historically used by the biggest auto brands.
Auto dealers say Tesla violates Georgia law by going outside the dealer system. The state’s dealer model gives added protections for consumers, such as helping to deal with manufacturer recalls, the said.
Bill Morie, president of the Georgia Automobile Dealers Association, said he wants to take time to see how other states have handled Tesla and to talk to the bill’s supporters. Until he does so, Morie said he can’t make a statement about how dealers might want to alter the bill.
Tesla has faced similar battles in other states where dealers have fought the company’s business model.
Tesla vice president of regulatory affairs James Chen said the company is willing to talk, but it won’t stop seeking a legislative solution this year nor will it agree to force consumers to go through independent dealers to buy a Tesla.
“We don’t give up,” Chen said.
“This is really about consumer choice for Georgians,” he said. If Tesla is forced to do all its sales online, it will make harder for Georgians to take test drives and talk to company representatives, Chen said.
The California-based maker sells vehicles in Georgia online and through its three stores in metro Atlanta. It’s base model vehicle 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.
Martin’s bill was written to apply only to Tesla’s situation rather than any of the world’s biggest auto makers. But State Rep. Tom Rice, a Republican from Norcross who chairs the House Motor Vehicles Committee, warned that such efforts eventually might allow other manufacturers to go outside their franchise dealer system. That, he said, would undercut dealers around the state who have invested in their businesses based on protections in the current law.
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