Washington state bill to let Tesla operate direct sales model

Article by Andrew Christian, on March 25, 2014

Following heart-breaking setbacks in Texas and New Jersey, Tesla Motors Inc. won ground in the Washington state. On President's Day in February, around 40 electric-car advocates gathered at the state capitol, rallying against a bill that would prevent Tesla from launching new sales offices in the Washington state.

When the Legislature completed its work on the bill earlier this month, a coalition of environmentally friendly Democrats and free-market Republicans had already peeled off restrictions from it. Once approved by the government, Tesla could sell its electric vehicles using its own stores instead of having dealers intermediate.

But instead of sulking, auto dealers welcomed the bill, since it provided exception for Tesla while boosting rules requiring other carmakers to sell through their showrooms. The outcome in the Washington state underscores that the current dispute between the Tesla and dealerships. They are still battling it out in states like Arizona, New York and Ohio.

If a ban is in effect at a certain state, Tesla can just display its cars in "galleries" and sell them online. Dealers would be willing to co-exist with Tesla in states where it sells directly, as long as bigger carmakers don't adopt its sales model.

"Our issue is not with Tesla itself, it's with the model," said Tammy Darvish, a vice president at Darcars Automotive Group in Silver Spring, Md., told Reuters. "How can we as auto dealers compete with manufacturers in the same market when we are completely dependent upon them for our inventories?"

Topics: tesla, sales

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