NC legislators drop bid to curb Tesla sales

bsiceloff@newsobserver.comJune 25, 2013 

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North Raleigh Tesla service center technician Taylor Fortier peels back the all-weather body sock for a newly-delivered Tesla Model S Friday afternoon, May 17, 2013 before Fortier takes the S into the service center for a pre-delivery inspection. Tesla has recently established a low profile service center in north Raleigh in anticipation of opening a Tesla electric car dealership here.

HARRY LYNCH — hlynch@newsobserver.com Buy Photo

— Without mentioning the California carmaker by name, a House committee pulled the plug Tuesday on a campaign by the state’s automobile dealers to block sales in North Carolina of the electric-powered Tesla.

Tesla Motors bypasses auto dealers to sell its high-priced plug-in cars – a $109,000 roadster and a $62,000 sedan – directly to consumers, by telephone and online. With fewer than 100 buyers so far in the state, the company says its product is not a good fit with the mass-market franchise dealer system.

A bill that won unanimous Senate approval in May would make Tesla’s business model illegal, requiring the company to sell through franchised dealers. It was part of a legislative package updating state regulations for how dealers operate, and what goods and services they buy and sell.

Robert Glaser, president of the N.C. Automobile Dealers Association, said in May that the anti-Tesla provision was intended to protect consumers.

But House leaders were cool to the proposal, which came to light just as Tesla was reporting quarterly profits and earning rave reviews for its Model S sedan – the Motor Trend magazine Car of the Year. House Speaker Thom Tillis said good things about the Tesla sedan after he took it for a test drive, and Gov. Pat McCrory took a spin, too.

Sen. Bill Rabon, a Southport Republican, asked the House Transportation Committee to approve a new version of the franchise dealer regulations with the anti-Tesla provisions stripped out. They were offered in a rewrite of an unrelated bill.

“I would like to tell you the provisions included in (the amended bill) are only those provisions agreed to by all industry stakeholders,” Rabon said. “And secondly, the provisions from the other Senate bill that remain in controversy among the industry stakeholders are not included in this.”

Rabon and committee members avoided saying anything about Tesla or the concerns of the car dealers, a group with many friends in the legislature. After Rep. Nelson Dollar, a Cary Republican, sought Rabon’s assurance that “there’s no one opposed” to the new bill, the committee quickly approved it on a voice vote.

In response to a question after the meeting, Rabon confirmed that the anti-Tesla proposal was dead.

“No, we’re not going to bring that back,” Rabon said.

The action was applauded by a Tesla executive who attended the meeting.

“I think folks understood that this was an attack on the free market, that this would have precluded North Carolinians from having the freedom to choose the cars they wanted to purchase,” said James Chen, Tesla public policy director. “The House leadership understood that.”

Tesla is facing similar legal and political fights with auto dealers in other states. Chen said the company recently won legislative victories in New York and Minnesota.

Asked whether Tesla helped its cause when it got McCrory and Tillis to take the car for a drive, Chen said: “I’m sure.”

Glaser, the auto dealers association president and lobbyist, did not respond to requests for comment.

Siceloff: 919-829-4527 or blogs.newsobserver.com/crosstown or twitter.com/Road_Worrier

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