Earlier this month, the Texas legislature declined to take action on a pair of bills that would have favored Tesla Motors by carving out an exception to the state’s ban on direct retail auto sales. This week, the New York State Assembly made something of a mirror image move, ending its legislative session without advancing two bills that Tesla says would have forced it to stop operations in the state.
The two bills – A07844 and S05725 – would have prohibited the state from issuing or renewing the registration of any car dealer owned by an automaker, unless that registration was issued before 2006, a set of criteria that would seem to apply only to Tesla. The bill also appears to make it illegal to register any new vehicle not sold by a franchised dealer.
Not surprisingly, Tesla and its CEO Elon Musk have strongly opposed the bills, which it says would put the company out of business in New York. As Tesla said in a statement:
The result would be that all of Tesla’s New York employees will lose their jobs. It means that New York-based suppliers to Tesla will lose business and New York consumers cannot buy the most advanced electric car in the world today. Banning Tesla from selling its vehicles is also a step in the wrong direction for reducing carbon vehicle emissions and the green environmental movement in New York. With the State of New York pushing so hard to lead green innovation supporting entire agencies for energy efficiency like NYSERDA, it absolutely defies logic to ban Tesla from selling electric cars in New York.
From the beginning, Tesla’s goal has been to catalyze the market for electric vehicles and selling through intermediaries at this stage of the company will not work. For Auto Dealer Associations to claim that restricting competition is in the best interests of the public is wrong and defies obvious common sense. If we are kept out of New York, it forestalls progress and defeats innovation.
The president of the Greater New York Automobile Dealers Association, Mark Schienberg, toldAutomotive News that Tesla should simply set up dealerships as other automakers do, and said that Musk has “just chosen that he’d rather not follow any of the rules and regulations and standards that each state has, and that’s why there’s a pushback right now.”
The Association also said that it had tried to make a deal that would allow Tesla’s three existing New York stores to keep operating but would prohibit new stores, a deal which Tesla turned down.
Elon Musk was happy about this week’s outcome – he tweeted, “The kill Tesla bill in NY was stopped in the 11th hour due to public outcry. Am super grateful to everyone who helped.” However, the battle in New York hasn’t been decided yet – it’s just on hold until next year. Similar battles are underway in Texas, Massachusetts and North Carolina, so the war is far from over.