Tesla Wins One In Minnesota: Bill To Ban Its Stores Defeated
Tesla Model S with DISRUPT license plate, March 2013 [photo: Sam Villella]
Like a lot of news from Tesla, this came in the form of a tweet by CEO Elon Musk on Friday morning.
It read, in its entirety, “Minnesota auto dealers tried to pass legislation to block Tesla stores. Bill was just defeated in Senate. Thanks MN!”
And indeed, a Minnesota Senate committee voted down the bill.
Score one for Tesla Motors [NSDQ:TSLA], at least for the moment.
But the fight isn’t over yet. On Wednesday, the state Assembly is holding a hearing on its own version of the bill.
Both Minnesota dealership owners and Tesla representatives will testify.
Most state laws prohibit carmakers from opening dealerships that compete with franchised dealers selling the same cars, because the company might give its own dealers better financial terms than the franchisees.
But auto dealers find Tesla’s model of selling exclusively online through factory-owned Tesla Stores highly threatening to the lock they have on all auto purchases.
Tesla, of course, has no franchised dealers–so the company says it is complying with all state laws governing car sales.
Nevertheless, the Minnesota Automobile Dealers Association followed the model laid down three years ago in Colorado and worked to persuade the legislature to amend the state’s franchising laws last month.
That amendment would ban auto companies from owning any dealerships at all, under any circumstances.
Auto dealers across the country, and their national group–the National Automobile Dealers Assocation, or NADA–view the Tesla model as a continuing threat to their livelihood.
Indeed, its chairman William Underriner told reporters last October that NADA “has ‘a whole mess of lawyers in Washington’ who work on state franchise laws,” which presumably NADA could deploy in every state where Tesla has or seeks to open a store or service facility.
CEO Elon Musk spoke out that month about various pending legislation pushed by dealers that targets Tesla Stores.
So, there’ll be more to this story. We’ll keep you posted.
[photo courtesy of Sam Villella]