Future of Tesla dealership unknown after House rejects online sales bill

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SALT LAKE CITY -- The new showroom owned by Tesla Motors looks ready to go, with a shiny car on display, fancy high definition touch screen computers mounted around the interior, and the exterior ringed with high voltage chargers for the famous electric luxury models.

But state law still says they can't open.

The Utah House of Representatives defeated HB 394 in a vote on the floor. The bill would have changed Utah franchise law, which currently protects the system of independently owned dealers acting as middlemen between the major car makers and the customer.

Tesla doesn't sell cars through that model. They make sales online, with showrooms available for test drives and to pick up cars.

Rep. Kim Coleman, R-West Jordan, sponsored legislation that would have cleared the way for Tesla.

"It is a new day and we can't create the new world using an old map," Coleman said.

But the majority of legislators opposed the bill, many saying they know a change is necessary, but they wanted to take more time to understand how it would impact long-established car dealers.

"These are the very businesses that have been contributing to the community, 16 and a half to 17 percent of our sales tax comes from our auto dealerships," said Rep. Ken Ivory, R-West Jordan.

Tesla motors general counsel, James Chen, sent FOX 13 a response to the House vote, saying:

"Tesla is disappointed that the House failed to vote out favorably the bill sponsored by Representative Kim Coleman – a bill that would have cleared the way for an American manufacturer of all electric vehicles to do business in the state. Tesla’s mission of catalyzing the world’s transition to electric vehicles will continue and we will explore other avenues that will allow direct sales of Tesla’s award winning vehicle in Utah so that Utah consumers can choose for themselves how and whether to buy a Tesla."

2 comments

  • David Whittington

    Barring Tesla’s online business model in Utah is ridiculous and is a perfect example of ‘chrony capitalism’ – the deep pockets of the existing car dealers are simply buying votes in the legislature. ALL of the current Utah car dealers have websites and they all sell cars online. Tesla simply wants to do the same thing. Utah’s government leaders always whine about too much government regulation and too much restriction of free markets, and here we have a total intrusion of the state government in the automobile markets. All this restriction of the free auto market ultimately hurts the consumers and forces consumers to pay higher prices. Also – Tesla is a very MINOR player in global automobile markets. Tesla’s presence in Utah would NOT hurt current Utah automobile dealer sales AT ALL. This whole story is just one more fiasco echoing through the halls of Utah’s incompetent and hypocritical legislature.

  • Brandon

    I think Tesla should keep it open and beautifully maintained as a reminder to Utah of how stupid of an idea voting for a self-imposed ban, on what is, reallistically, the future of vehicular transportation in the America. …Christ on a stick…

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