Lobbyists Torpedo Tesla Stores in Connecticut
General Motors backs lobbying efforts nationwide to compel Tesla to ‘Franchise or bust.’
General Motors is committed to taking on Tesla everywhere – the showroom floor, executive snark, and statehouses across the country. The Detroit automaker has been the public face of OEM opposition to Tesla’s direct sales model, backing lobbying efforts and making public statements throughout various quests to kill Tesla-friendly legislation in at least five states. The General just won another victory in Connecticut, where for the second year in a row a bill that would have allowed Tesla to open up stores has died in the senate.
(To clarify, Tesla has stores in 24 states and Washington, D.C. A store works much like a traditional dealership, prospective customers can check out a Tesla product, take a test drive, and ask all the usual questions, and order a car. Tesla galleries are Monty Python-esque window shopping – customers can look at and ask questions about a vehicle, but test drives aren’t allowed and gallery employees can’t discuss price or take orders for cars. Tesla plans to open a gallery in Connecticut, but it wants stores there.)
Last year Connecticut Republican State Senator Art Linares proposed legislation that would clear the way for three Tesla stores. That roused the Connecticut Automotive Retailer’s Association (CARA), which lit its torches, grabbed its pitchforks and headed to the state house with GM providing heavyweight backup. The CARA also started the now-defunct Tesla Crash website, basically an RSS feed for anti-Tesla news stories. The Connecticut State House passed the bill, the senate demurred and the legislation died.
This year democratic Senate Majority Leader Bob Duff signed on as sponsor of slightly revised legislation in Senate Bill 3, which would allow two Tesla direct-sale stores instead of three. CARA and GM got to work again, this time with the public assistance of the Alliance of Automobile Manufacturers. Duff tried to work out a compromise with his Democratic caucus without resorting to strong-arm maneuvers, and Tesla reps spent weeks negotiating with GM and CARA. Tesla even lobbed a late Hail Mary up for the state pols, saying it would build a regional distribution center and hire 150 people with salaries from $40,000 to $100,000 – that would have been in addition to the 50 employees at the stores. Not one of the politicians even tried to catch the pass, so Duff didn’t table the bill for a vote. Duff response to SB3’s death-by-deadlock was, “I think the car dealers and others have been very effective in lobbying in their favor. We’ll come back again and try in another year.”
GM’s has 43 storefronts among the 270 independent dealerships in the state. The automaker is consistent in its stated reason for nationwide antipathy toward Tesla’s goal of direct sales: GM opposes “a distinctly different set of rules,” and “an uneven playing field.” Franchise laws in all 50 states prohibit automakers from engaging in direct sales, The General expects Tesla to follow that rule.
The opposition is about more than just Tesla, though. State lawmakers can’t legally create an exemption for just one company, so the politicians that drafted the bill wrote permission for a specific kind of company – it had to be an electric car company with no physical presence in the state and no franchise dealership agreement. GM and the dealers worry that once the door is open, others will find a way in, perhaps by claiming precedent, perhaps by conforming to the confines of the law. And that could open up competition from, you guessed it, the Chinese and other foreign elements.
Not all of the Connecticut officials are ready to give up on the bill this year, with the House Majority Leader saying he’s prepared to pass the bill again, and a senator holding out hope of calling a vote.
In the meantime, we find it funny that GM gloats over the situation it’s helping to create. When automaker CEO Mary Barra announced the production Chevrolet Bolt EV this year at the Consumer Electronics Show, she said, “We believe strongly in the dealer model. Unlike some EV customers, Bolt EV customers never have to worry about driving to another state to buy, service or support their vehicle.”