Tesla not giving up on Connecticut stores

Setback? What Setback?

Electric carmaker Tesla Motors is not giving up on a proposal to sell vehicles directly to Connecticut consumers, despite legislation dying in the Senate that would have allowed up to three new retail stores in the state. Will Nicholas, government relations manager for the California-based company, said Wednesday the car company was disappointed the bill died due to state Senate inaction, especially after passing the House of Representatives in late May by a wide margin. The company blamed the bill's demise on lawmakers' "competing budget priorities," referring to the unusual state budget vote on the final day of the legislative session.

While Nicholas said the company would like the General Assembly to resurrect the proposal during the upcoming special legislative session, he wasn't sure lawmakers will take it up. If no action is taken right away, Nicholas said Tesla plans to revisit the bill next year.

"We'll still have a very compelling argument to come and be regulated and fairly compete in the state," he said.

The bill that passed the House marked a compromise reached between Tesla and the Connecticut Automotive Retailers Association, which originally had opposed changing a long-standing state law that prevents car manufacturers from selling directly to consumers. At one point in the negotiations, Tesla agreed to limit their stores to five. Ultimately, the final bill restricted Tesla to only three stores.

The legislation, which didn't mention Tesla by name but appeared to be tailored specifically to the firm, required the new stores to comply with existing consumer protections mandated by the Departments of Motor Vehicles and Consumer Protection.

James Fleming, president of the Connecticut Auto Retailers Association, called the proposed exemption in the state's franchise law "limited." He said it left open "the future possibility of direct sell stores joining the dealer franchise system if they grow to their potential." Some individual dealers, however, still opposed the legislation.

When asked if Tesla would support the same language next year, including the three-store limit, Nicholas said Tesla would "probably reevaluate our strategy" based on the company's level of business in Connecticut. "We would have been a bit stifled with the current concessions that we made," he said.

Diarmuid O'Connell, vice president of business development for Tesla, said the company plans to continue serving its current customers at its service center in Milford and "welcome others that learn of our technology and vehicles in other states." He said the company is looking forward to working with lawmakers in the next legislative session, which convenes in February.

Currently Tesla has stores in about 20 other states, including neighboring New York and Massachusetts. Last year, the Connecticut Department of Energy and Environmental Protection tried to get more dealers interested in selling plug-in vehicles, putting the onus on the salesmen instead of ginning up demand among buyers.

The AP contributed to this report.

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