Signs of an electric debate over who can sell you a new car

Signs point to a parallel battle in the General Assembly. Last week, the National Automobile Dealers Association began trolling for sympathetic lawmakers. While Georgia dealers say they have “no plans” to revisit an anti-Tesla bill that failed last year, Tesla is preparing a defense. It has already hired one of the top lobbying firms in Atlanta.

Last year, similar legislative fights occurred in Missouri and Michigan. Tesla survived in Missouri, but car dealers won in the state built by the internal combustion engine. In both cases, the confrontations were largely covert, erupting only in the last hours, and Tesla is expecting the same here.

“I think it’s fair to say we’ll see some sort of activity in the Legislature, but it probably won’t be apparent until it’s more than half pregnant, if the other side is pushing it,” said Diarmuid O’Connell, Tesla’s vice president for corporate and business development. “They’re consistently seeking to perfect their monopoly.”

A loss here would force Tesla to shut down its just-opened Lenox Square showroom, where the company intends to sell 150 cars each year — and no more. That’s what state law allows, the company maintains.

Other buyers are directed out-of-state. The expensive vehicles – base price for a Model S is in the $70,000 range — are delivered to their new Georgia homes just as Amazon.com might deliver a smart phone or tablet.

Shelve that campaign rhetoric you heard last fall. The day-to-day work of your General Assembly is the selection of winners and losers in this state’s economy — by laying down the rules of business.

Tesla’s numbers are small. Fewer than 900 of its vehicles currently prowl Georgia roads. But like Uber, which proposes to remake the taxi industry, or craft brewers, who this year are pushing for the right to sell their beer where they make it, Tesla threatens a paradigm shift in the way automobiles are sold.

Most Georgia car buyers don’t realize that their purchases are guided by state laws that presume a two-tiered system: Manufacturers sell to independent franchise owners, who sell to consumers. You can’t buy a Ford or Chevy or Nissan or Toyota directly from the manufacturer.

Tesla breaks that mold. It has no franchisees, and thus, the company maintains, Georgia’s restrictions on direct sales to consumers shouldn’t apply. The company does, however, currently observe a 150-car annual limit set by the state on “custom design” vehicles.

For Tesla, direct sales are an evangelical matter. “It’s completely unreasonable to expect that a dealer, whose business is 99 percent invested in moving gasoline-driven vehicles, is going to take the time and effort and investment to push a technology that represents less than one percent of his business,” Tesla’s O’Connell said.

Late last year, the Georgia Automobile Dealers Association brought Tesla before an administrative law judge, arguing that the electric car maker is indeed covered by Georgia law banning direct sales to consumers.

GADA spokesman Chip Lake says the fight isn’t over technology. “Automobile dealers are very supportive of electric vehicles. There are dealers all over the state that sell electric vehicles,” he said. “Auto dealers just believe Telsa is not complying with state law.”

A full hearing is scheduled for next month, but the final decision will be left to Lynne Riley, the new state revenue commissioner. The General Assembly could become a court of appeals for the loser.

At the risk of raising some eyebrows, car dealers are casting themselves in the role of consumer protectors. “Because dealers are paid by factories to perform warranty and recall work, they are incentivized to act on their customers behalf on what can sometimes be contentious safety issues,” the NADA said in an email petition that it sent to state lawmakers last week – apparently part of an effort to cull friends and foes.

The Georgia Automobile Dealers Association wields considerable influence in the state Capitol. My AJC colleague Matt Kempner counted up more than $600,000 in recent campaign contributions from the GADA to state lawmakers.

Nonetheless, a bill to boot Tesla from Georgia, introduced in 2013, mysteriously died last year. No fingerprints were found on the corpse of Senate Bill 166, which was introduced by Butch Miller, R-Gainesville, owner of a car dealership.

Miller declined to comment last week. But the quiet dispatching of legislation is often a sign of strong, behind-the-scenes forces.

So it is worth noting that Lt. Gov. Casey Cagle, who presides over the Senate, drives a Leaf — the all-electric Nissan vehicle. Others see the hand of Georgia Power, which has invested significantly in charging stations for electric vehicles – or EVs, in industry jargon.

I put a call into the utility. Spokesman Jacob Hawkins said Georgia Power took no position on S.B. 166 last year, and doesn’t intend to involve itself in any Tesla-dealership fight this year. But Hawkins also said this:

“We’re focused on products and services that meet the needs of our customers, including increasing interest in EVs.”

The word at Tesla headquarters in California is that Georgia Power CEO Paul Bowers drives one of its cars. Hawkins wouldn’t confirm that. “But if you come to our parking deck, you’ll see a variety of EVs. All models,” Hawkins said.