Sen. Linares: Tesla is “creating jobs across the country, but not here” (AP)

February 7, 2015

AP Story

HARTFORD, Conn. (AP) – Connecticut lawmakers voiced interest Friday in finding a compromise that would allow Tesla Motors to sell its electric cars directly to consumers while providing some protections for the state’s independent franchise dealerships.

Current state law prevents car manufacturers from selling directly to consumers. Tesla has been denied a state dealership license, but allowed to open a repair facility in Milford.

The General Assembly’s Transportation Committee heard testimony Friday on a bill that would allow Tesla to sell its cars in Connecticut.

Rep. Tony Guerrera, D-Rocky Hill, the committee’s co-chairman, said he understands the frustration among consumers who must travel to New York or Massachusetts to buy one of the vehicles, but he said lawmakers have to “be cautious and don’t infringe on other companies.” Guerrera offered up the idea of allowing Tesla to open a limited number of stores in Connecticut, possible four or five. While Tesla executives liked the idea, the franchise owners were not enthusiastic.

The committee still needs to vote on the bill, which is expected to change as negotiations continue throughout the legislative session.

The Connecticut Automotive Retailers Association opposes the current bill and contends it makes more sense for consumers and Tesla to use the existing system of dealerships to sell the cars.

“The consumer wins if (Tesla founder Elon Musk) opens up his product to our network,” said Jeffrey Aiosa, president and owner of Carriage House Mercedes Benz in New London. Aiosa said Musk could sell his cars to dealers at a profit, while consumers could get a lower price from competing dealers, as well as receive the support services of a dealership.

Diarmuid O’Connell, vice president of business and corporate development for Tesla, said the 12-year-old company has a stellar service record. Also, he said the firm only manufactured about 30,000 vehicles last year, making it a small player in the world’s car market. He said it was premature to sell Teslas through a dealership system, but suggested a hybrid model with direct sales and dealerships could be considered once the company becomes a high volume manufacturer.

Tesla, based in Palo Alto, California, currently has stores in about 20 states. In recent years, state legislatures across the country have debated whether to change laws similar to Connecticut’s to allow Tesla to sell directly to consumers instead of through the dealership system. A base Tesla model starts at about $70,000.

Sen. Art Linares, R-Westbrook, the author of the bill and a soon-to-be-Tesla owner, acknowledged the important role car dealerships play in Connecticut – from employing more than 13,000 people to sponsoring Little League teams – but said the state should welcome these fully electric vehicles with open arms. He said his bill would only exempt Tesla, not other car companies from Connecticut’s dealership law.

“Tesla is an innovative business,” he said. “They’re creating jobs across the country, but not here in Connecticut.”

It was obvious Friday that the sporty sedan is a hit among members of the legislature’s Transportation Committee. Several got an opportunity on Thursday to take a test drive.

“They had to drag me out of the car when they took my picture in it,” said Rep. Gail Lavielle, R-Wilton.

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