Tesla offering concessions to help pass direct sales bill in Connecticut

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Electric Car Maker Tesla Opens Store In Miami Mall / Image Credit: Joe Raedle via Getty Images
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This week, electric-car maker Tesla Motors offered to make some compromises to help state lawmakers pass legislation this year that would allow direct sales to Connecticut consumers. Tesla currently operates a repair shop in Milford but state law prevents it from selling cars straight to consumers, who must buy the cars out-of-state.

The California company notified legislators it would agree to a limited number of sales locations in the state, capped at five. Tesla also said it would agree to language in the bill limiting direct sales to only manufacturers producing electric vehicles solely and to those who don't currently use independent franchise dealers.

To further limit the impact of the legislation, Tesla said it would agree to language restricting direct sales to manufacturers with an established presence in Connecticut.

"All told, these concessions would make the bill, if it became law, the most stringent limit on Tesla in any of the 35 states they are permitted to sell in," read an email sent Tuesday to state legislators from two lobbyists working for Tesla. "Fewer concessions than these have been endorsed by auto dealer associations in Tennessee, Maryland, and Pennsylvania."

Connecticut's major auto dealer association did not appear to be swayed, however.

James Fleming, president of the Connecticut Automotive Retailers Association, said Tesla's proposal still creates a "massive loophole" in the current auto franchise law and puts 13,000 jobs across Connecticut at risk.

"We like the Tesla product, but it's the long-term implications about who else is going to qualify," Fleming said.

Connecticut's franchise law was originally put in place to protect car dealerships from unfair competition from car manufacturers.

Under Tesla's proposal, Fleming contends, it would be easy for one of the 32 existing manufacturers licensed to sell vehicles in Connecticut to create a new entity and sell directly to consumers. Also, he says, large, electric car manufacturers from India and China not yet in the market could also take advantage of the alleged loophole Tesla wants to create.

The dealers maintain it makes more sense for consumers and Tesla to use the existing system of mostly family-owned dealerships to sell their cars.

Rep. Antonio "Tony" Guerrera, D-Rocky Hill, co-chairman of the General Assembly's Transportation Committee, has been holding closed-door discussions with Tesla and auto dealers.

"I'm hoping at the end of day that we can come up with something that everyone can live with, or that everyone hates," he said, adding that he'd prefer the two sides reach a compromise on their own.

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The AP contributed to this report.

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