Published on March 25th, 2014 | by James Ayre


Tesla Wars — Bill To Allow Direct-To-Customer Car Sales In Arizona Advances

March 25th, 2014 by  

Tesla’s ongoing nearly nationwide war with the car dealership association appears to be entering yet another new phase, as the state legislature of Arizona has advanced a bill that would completely legalize the direct-to-customers sales model that the EV pioneer uses.

Given the fact that Tesla is considering bringing its gigafactory — and all the accompanying jobs that go with it — to the state, the move isn’t exactly surprising, but interesting nonetheless. I guess that all the lobbying, behind-the-scenes deals, and big wads of cash can only go so far when that many potential jobs are on the line. πŸ™‚

Tesla Store Image Credit: Tesla

Tesla Store
Image Credit: Tesla

The car dealers must be disappointed, despite their recent success elsewhere. It’ll be interesting up see how this all unfolds.

The bill in question, Arizona House Bill 2123, was originally on a completely unrelated topic, but was then amended by State Senate Leader John McComish as a “pre-emptive strike against future laws to outlaw Tesla’s model similar to those introduced in several other states.”

This new bill would function in that way as the legalization of direct sales by automakers, so long as they manufacture solely electric vehicles and maintain a service center within state borders.

When the possibility of new jobs clashes with the desires of powerful campaign contributors, sometimes jobs can take priority. That may be what’s happening in Arizona.

A similar bill died in January. But now Arizona has been named one of four finalists for Tesla’s planned “gigafactory” for the lithium-ion cells and battery packs it will need to expand its electric-car production within three years.

When you consider the fact that car dealers have their own priorities (and perhaps, in some “circumstances,” even reasons to substantially mark EVs up beyond mere profit-making…), the bill makes a good deal of sense.

Not everyone sees it that way of course. And the dealers — or their lobbyists, I should say — have provided a number of LOL-worthy comments/arguments to demonstrate that. My favorite of those is the comment that it’s not “fair” because “we should all be treated the same.” That’s certainly rich coming from a group known for its underhanded tactics and willingness to play dirty.

Reminds me of the comments made by the Minnesota Automobile Dealers Association last year that Tesla shouldn’t be allowed to open stores in Minnesota because the possibility of dealers having to compete with automakers on the retail front was simply β€œnot fair.” Presumably because the inefficient and corrupt operation models of the dealerships can’t compete with Tesla’s far more professional and uniform approach?

As it stands currently, Tesla runs one showroom in Arizona — but if you decide when you’re there that your interested in one, you have to buy it on your own online, no means of doing so at the showroom is allowed. Why not? Who benefits from such a situation other than the dealers?

Commenting on that reality, Representative Warren Petersen [R-Gilbert] — the bill’s original sponsor — noted that it was a “great opportunity… to send a message that we welcome business and we welcome Tesla here to Arizona.”

With that promise of greater business –particularly with regards to the potential hosting of the gigafactory — it seems as though the bill has a good shot of making it all the way through the legislature.

What do you think?

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

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  • Larry

    I have confidence that the Republican majority in AZ will find some way to destroy a good piece of proposed legislation. “No Good deed goes unpunished” Is the motto of the majority.

    • Bob_Wallace

      NPR did an interesting piece about Arizona this morning. They talked about how Arizona’s racist laws and attitudes damaged business and business has told the state government to change their ways.

      Wind, solar and electric vehicles are starting to make money for those who care only about money.

      That’s how we’ll defeat fossil fuels.

  • StefanoR99

    The dealership argument just doesn’t stack up. If all manufacturers could sell direct, then presumably the manufacturers would start buying existing dealerships rather than starting their own from scratch (or selling direct).

    In this case, all of the people employed at said dealerships would still have their jobs – manufacturers still need salesman and service centers.

    In the UK most dealerships are now owned by the manufacturer and have been since the 1990s. No jobs were lost and owners of the franchises sold to the manufacturer and made a killing as far as I’m aware.

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