Tesla Approved to Sell in Utah
Over the past several years, there’s been an impending showdown between Tesla and the auto dealerships in Utah. In a recent turn of events in May, it turns out Tesla has finally won that showdown and will be allowed to sell their vehicles directly to consumers in the state, which was previously disallowed due to a law that prevented vehicle manufacturers from owning their own dealerships. Read more about this recent Utah legal saga and why Tesla doesn’t allow dealerships to sell their vehicles...
New Bill Passed
Tesla actually failed to win their case in front of the Utah Supreme Court last year. Because of that, they had to go back to the legislature and push to get a new law that would enable a new model for auto selling rules. This led to a house bill, H.B. 369, which was sponsored by Rep Kim Coleman, R-West Jordan. This model doesn’t enable large manufacturers, such as Ford or Chevrolet, to sell their vehicles directly, but it creates room for companies with highly specific business models, such as Tesla.
There’s room in the bill for changes in the future, as new automakers continue to take the market. In addition, representatives and senators say this helps establish the state’s clear free market principles, which are outlined in the constitution of the state.
Salt Lake City Store
Tesla actually had plans for a Utah expansion back in 2015, but were unsuccessful in getting the law changed before they had a location open. Because of this, Tesla was relegated to simply having a showroom in Salt Lake City, where a representative could explain the benefits of Tesla vehicles, but couldn’t actually sell them. Instead, buyers would be required to make an out-of-state purchase and have the vehicle delivered to them.
Tesla’s Proprietary Model
Tesla’s argument was that traditional auto dealerships would be inadequate to sell Tesla cars, since part of the Tesla business model was that their salesmen were making a pitch to convince consumers that electric vehicles were a better alternative to gas-powered vehicles. Naturally, there would be a conflict of interest in a dealership where a salesman had incentive to sell both electric and gas-powered cars.
Further showdowns are expected between dealerships in Texas and Michigan this year.
10 Jun, 2018
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