Colorado to allow direct sales model—good news for Tesla and Rivian

The tedious and complicated war between Tesla and the auto dealers continues to drag on. At present, the country is a patchwork—some states explicitly allow Tesla’s direct sales model, some explicitly prohibit it, and in others some sort of compromise has been reached. Tesla recently won an important battle in Michigan, and now it appears that another victory is at hand in Colorado.

The situation in Colorado is unusual. Unlike most other states, which have had long-standing prohibitions on automakers selling cars directly to the public, Colorado only implemented such a ban in 2010. Tesla already had one store in the state, so this was grandfathered in, but the company was not allowed to open other stores.  (It does have several other locations in Colorado, but these are “galleries,” where customers can look at cars but not actually buy—nudge nudge, wink wink.)

Tesla was the only company to be grandfathered in, so as it stands, other EV-makers such as Rivian are banned from selling directly to buyers in the state.

State Senate Bill 20-167, which would allow companies that make “only electric motor vehicles” to sell directly to consumers, passed the Colorado Senate in February, and will now be sent to Governor Jared Polis, who is expected to sign it.

The bill is the result of a compromise between proponents (Rivian and Tesla) and opponents (auto dealership lobby groups). An earlier version seemed to leave open the possibility that legacy automakers could also sell their EVs directly. Auto dealer groups agreed to drop their opposition to the bill after it was modified to make it clear that the direct-to-consumer model is allowed only for automakers that sell only EVs, and that have no existing dealerships in the state.

The new law is good news for Tesla, but it’s especially important for Rivian. Colorado is the #4 state in the US in per-capita EV sales, and it’s ground zero for the outdoorsy drivers Rivian is targeting with its electric SUV and pickup.

“A good compromise was reached, which brought the Colorado Auto Dealers to a neutral position,” lobbyist Mike Feeley told the Colorado Sun. “They are ready for the competition, they are ready to move this issue out into the marketplace as opposed to the legislature, and they look forward to competing vigorously in the marketplace as this market and industry evolves.”

Sources: Colorado Sun, Electrek, Teslarati, CleanTechnica, The Truth About Cars
Image: Nicolas Raymond