Washington state officially approves Tesla’s direct-sales model

Article by Andrew Christian, on April 10, 2014

Tesla Motors Inc. can now continue its direct-sales operations and even expand in Washington state after Gov. Jay Inslee signed a bill allowing the electric-vehicle maker to continue selling its cars directly to customer s instead of franchised dealerships in the state. Tesla has two stores in Seattle and Bellevue.

Tesla said in a statement that the legislation should serve as a “model solution” for other states where the EV maker have been facing stiff opposition from local dealers.

Tesla spokesman Patrick Jones told Automotive News in an e-mail that the carmaker thanks Gov. Inslee and the Washington State Legislature for supporting “a culture of innovation” and making the right decision for consumers. Jones said the legislation will enable the carmaker to continue its mission of stimulating the EV market by interacting directly with consumers.

According to Bryan Imai, senior general counsel at the Washington State Auto Dealer Association, remarked that bill provisions ensure a fair balance between dealers and carmakers. The bill toughens existing laws between carmakers and state dealers that prevent other carmakers from selling directly to consumers.

Under the bill, a carmaker that held a dealership license as of Jan. 1, 2014, would be exempt from the ban on carmaker ownership, Imai noting that Tesla held a dealership license in Washington as of the date. The wording of the bill prevents other startup carmakers from setting up direct-sales operations in the state.

The National Automobile Dealers Association, said in an e-mailed statement to Automotive News, reiterated that auto sales should be through independent franchised new-car dealers. NADA said that it is up to each state to decide whether Tesla or any carmaker is complying with laws that regulate sale of new vehicles.

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