Los Angeles Times

Tesla fans petition U.S. to allow direct sales

Petitioner­s say some states prevent the carmaker from selling directly to buyers to protect auto dealers.

- By Catherine Green catherine.green @latimes.com

A petition to the White House to allow Tesla Motors Inc. to sell its electric vehicles straight to consumers throughout the U.S. surpassed the 100,000-signature threshold it needed this week to prompt a response from the Obama administra­tion.

“States should not be allowed to prevent Tesla Motors from selling cars directly to customers,” the petition created June 5 by a user in Stow, Mass., reads.

The system available on the White House’s website lets users create petitions for their causes, and requires petitioner­s to collect 100,000 signatures within 30 days before the administra­tion will officially acknowledg­e them.

“The state legislator­s are trying to unfairly protect automobile dealers in their states from competitio­n,” fans of the luxury car brand wrote. “Tesla is providing competitio­n, which is good for consumers.”

Dealer associatio­ns in several states have countered that argument, saying it’s the franchise dealership system that encourages competitio­n and protects customers.

“Consumers do better with multiple sellers and multiple retailers in a given market,” a spokesman for the National Automobile Dealers Assn. said. “If all the stores that sell Ford vehicles were owned by Ford Motor Co., for example, what incentive would there be for any of the stores to sell a vehicle for less than manufactur­er suggested retail price?”

Tesla recently faced a series of legislativ­e battles with dealer associatio­ns in New York, North Carolina, Massachuse­tts and Minnesota. Groups in each state challenged the carmaker’s refusal to abide by tradi- tional sales models, sidesteppi­ng franchise dealership­s to sell straight to its customers online, by telephone or, in some states, inside Tesla stores.

Tesla proposed legislatio­n to allow direct sales in Texas, where employees in showroom “galleries” are not permitted to offer test drives, take orders or discuss the price of the Model S, but that bill was shelved in June. Tesla is also trying to get approved for a license in Virginia.

Tesla declined to offer formal comment on the petition, but Shanna Hendriks, a spokeswoma­n for the Palo Alto-based carmaker, said it wasn’t because of indifferen­ce.

“We’re thrilled,” Hendriks said by phone Wednesday. “The groundswel­l of support that came with [the petition] is really impressive. The ball is in the White House’s court.”

But the National Automobile Dealers Assn. said the federal government shouldn’t have a hand in how individual states handle auto sales.

“The states have decided that it is in the public interest to require a local pres- ence for the sale, distributi­on and servicing of the automobile, which is a necessity of modern life,” the NADA spokesman said. “All auto manufactur­ers should be required to play by the same rules.”

Kirk Brown, managing director of electric car advocacy group Plug In America, said support evidenced by the petition was important.

“It underscore­s that we need to continue clearing obstacles in the path for electric transporta­tion, and that there is a large and growing market developing for these game-changing electric vehicles,” Brown said. “A new and improved transporta­tion sector is indeed here. Now we need to continue nurturing it.”

Jay Friedland, Plug In America’s legislativ­e director, said auto dealer associatio­ns at state and local levels are likely to be formidable foes because of their political sway. He noted that car sales contribute a substantia­l amount of state sales taxes, which might add to the dealers’ case. But he also cited a 2005 Supreme Court ruling that prohibited restrictio­ns in Michigan and New York on sales by out-ofstate wineries.

Friedland said interstate commerce probably would play a role in any developmen­ts in Tesla’s case, but “all politics are local. It would be an interestin­g challenge to get a bill through Congress. But things like that have been done before, so there is a possibilit­y.”

 ?? A TESLA DEALERSHIP
Joe Raedle Getty Images ?? in Miami. The carmaker doesn’t abide by traditiona­l sales models, sidesteppi­ng franchise dealership­s to sell straight to its customers.
A TESLA DEALERSHIP Joe Raedle Getty Images in Miami. The carmaker doesn’t abide by traditiona­l sales models, sidesteppi­ng franchise dealership­s to sell straight to its customers.

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