|Dealers Are Charging Up to Challenge Tesla - with Cars Too|
|The DMV report says Tesla's Greenwich showroom violated Connecticut's auto sales law.|
|BMW is expected to make a near total committmen to electric vehicles in the next ten years.|
|The All-electric Chevy Bolt is expected to sell more than 20,000 units in 2017.|
By Mitchell Young
Hartford: The battle between The Connecticut Automotive Retailers Association and Tesla is being waged on a new front.
Tesla with the support of legislators from both the Republican and Democratic parties is seeking the right to sell cars direct to the public.
Tesla currently operates showrooms in Greenwich and Milford and has “supercharging” stations in West Hartford and Darien.
Currently in Connecticut and several other states, auto manufacturers must utilize dealers to sell their cars. The dealers argue this has created significant competition and service advantages for consumers and that if sales were allowed directly by the manufacturer, competition, prices and services would suffer.
Tesla has argued the unique nature of their electric automobiles, technology and company make selling through dealers untenable and a “conflict of interest” for the dealers that will mostly sell internal combustion engine vehicles.. Under current Connecticut law, Tesla customers can visit showrooms but can’t process the sale at the location.
Tesla has gathered support from environmental groups that see the laws protecting local franchises as harming the environment. Daniel Gatti is a blogger for the Union of Concerned Scientists that “specializes in transportation policy in the Northeast,” he claims in a recent article that auto dealers in the Northeast aren’t doing a good job selling their “electric” vehicles.
Gatting writes that “between January and June of 2016, dealers in the Bridgeport to New York City metro area had 90 percent fewer EVs listed for sale than Oakland, when adjusted for relative car ownership.”
He added, a recent report by the Sierra Club found that Tesla stores provide EV customers with far superior service, as Tesla was more likely to have EVs available to test drive, more likely to be knowledgeable about state and local incentives, and more likely to be able to correctly answer technical questions about charging EVs, than traditional car dealerships.”
Tesla CEO, Elon Musk has also claimed that his desire for direct sales is based on a conflict of interest that dealers have with their internal combustion brands.
The dealers counter that eventually this legislation will end the franchise system in Connecticut and that many of the same arguments or court challenges will be available to other auto manufacturers that would want control and additional profits of their sales efforts.
Additionally, Tesla is free to seek franchise owners that do not own existing dealerships.
Electric Cars Are Coming To Connecticut
The state of Connecticut offers several incentives to electric and hybrid vehicles, including: reduced taxes, operation in HVO lanes and special parking options. Connecticut has been cited for these rules as a leader in the acceptance of hybrid vehicles by consumers.
Additionally, Connecticut joined eight other states, including Connecticut, Maryland, Massachusetts, New York, Oregon, California, Rhode Island and Vermont on “an action plam to put 3.3 million zero-emission vehicles (ZEVs) on the road by 2025.”
The viability of that plan has been questioned, as that goal is reportedly more than 15 times as many ZEVs that were presumed to be on the road in the entire U.S. in 2015. The plan requires states to establish rates for charging vehicles that are competitive with gasoline and to support the adoption of public and private ZEV fleets. Meeting those goals in Connecticut would have to assume a broad sales effort by multiple manufacturers and dealers beyond Tesla and Nissan which also sells an all electric vehicle.
Chevrolet has introduced the all electric Bolt EV and will be priced similar to a new offering by Tesla that is also expected to begin shipping in 2017 to consumers. BMW has two all electric vehicles in production, a luxury and “economy” model.
All-electric vehicles are being promised for sale by most major manufacturers over the next few years as well. Conflict of interest or not Connecticut’s auto franchisers will be trying to sell all electric inventory as well.
Dealers say put on the brakes
The Connecticut dealers announcement says they “are urging legislators to either recommit or not take action on House Bill 7097, An Act Concerning the Licensing of New and Used Car Dealers, due to a recent decision from the Connecticut Department of Motor Vehicles that Tesla is in clear violation of Connecticut law by conducting activities collectively amounting to new car sales at their Greenwich Gallery.”
The dealers report that the DMV “conducted hearings on January 23 and 24 in Wethersfield to garner information on activities conducted at Tesla’s “Gallery” in Greenwich, located at 340 Greenwich Avenue.” They added, a Tesla employee and manager of the Tesla Gallery retail store testified under oath at the DMV hearings that Tesla vehicles were sold from the Greenwich store and delivered in violation of Connecticut law. He also described how employees of the Tesla Gallery location in Greenwich were compensated based on meeting vehicle sales goals attributed to the Greenwich Connecticut store customers.”
Jim Fleming, President of the Connecticut Automotive Retailers Association, said, “I just do not understand how Tesla can be relied upon to follow the loophole being carved out for them in House Bill 7097 given their blatant disregard of the state and local laws.”
CARA represents testified before the Transportation committee, saying “Tesla is able to sell their cars in Connecticut today through a licensed dealership. Instead Tesla has created an illegal means of selling cars while they are seeking legislation to allow them to operate on a field strictly for them.”