Electric Car Manufacturer Challenges State Motor Vehicle Dealership Law
At a press conference Friday, sponsored by Assemblyman David Buchwald (D-White Plains/Westchester) and electric car maker Tesla at the Tesla showroom in The Westchester mall, White Plains, a gathering of local elected officials, business leaders and environmental advocates expressed their strong opposition to Bill A.7844-A, which would end the direct sale of Tesla’s electric cars in New York State.
In an attempt to protect automotive dealerships and franchises from potentially harmful and unfair business practices by the major automotive companies and franchisors, it seems local government representatives feel the bill steps on the toes of innovative and clean-energy technology and are trying to grow momentum to stop the bill from passing through the full assembly.
In an email exchange with The White Plains Examiner after the press conference, Buchwald explained: “The bill as currently crafted prohibits a car manufacturer from selling directly to consumers. It is section 2 of the bill that most specifically addresses this point, by preventing the Department of Motor Vehicles from licensing a manufacturer to sell cars. Tesla is the only car manufacturer that I’m aware of that indeed does sell directly to consumers.”
Buchwald further explained: “When New Jersey established a similar rule a few weeks ago, Tesla announced that New Jersey customers would now need to go to Pennsylvania or New York to find a Tesla showroom that sells cars. I expect that residents of northern New Jersey will be able to easily come over the Tappan Zee Bridge to make their purchases in White Plains — unless of course New York State closes the door to this environmentally innovative, job-producing company,” he said.
The bill mandates that vehicles in New York be sold exclusively through dealerships, outlawing automobile sales directly to the public. Tesla is the only car manufacturer in New York that sells directly to consumers through its retail stores.
The bill passed the New York Assembly Codes Committee on Wednesday with a bi-partisan vote of 21 to one, but still must be voted on by the full State Assembly before it becomes law.
Assemblyman Thomas Abinanti (D-Greenburgh/Mt. Pleasant), a co-sponsor of Bill A.7844-A, in an interview Monday explained that the thrust of the bill is to protect the thousands of local small businesses – the dealerships – from the big manufacturing companies like General Motors and keep control of the industry out of the hands of the big guys. “One little piece of this bill affects Tesla,” Abinanti said, which he claims found a loophole to sell its expensive vehicles directly from the manufacturer.
“This is an upgrade and modernization of a statute that went into effect in 1983 and has been updated periodically. This new bill is an attempt to clarify the 2008 update that allows for reasonable compensation of local people. Tesla is attempting to make this look anti-environment, but what about the other electric vehicles out there that are sold through dealerships, like the Ford Focus and Nissan Leaf?” Abinanti asked.
In a recent article by the Associated Press it seems the state of Arizona has been faced with the same question. Arizona has a bill pending that would allow manufacturers to sell directly in the state if they solely sell electric vehicles and have at least one service center in the state. The article suggests that this bill: “Obviously written specifically for Tesla, indicates Arizona is vying for Tesla’s gigafactory, which Tesla says it plans to begin construction on this year.”
At the White Plains press conference Tesla representatives talked about expansion of its Supercharger network across the State of New York to enable free long distance travel for Model S customers.
Tesla is building in additional electrical capacity and reserving extra real estate to co-locate non-Tesla charging points at Supercharger locations. The company announced that it welcomes businesses interested in installing EV-compatible charge points for non-Tesla vehicles to inquire about permitting and construction at Supercharger locations in New York State. Tesla intends to install more than five Supercharger stations in the State, with two already having been installed at the JFK Airport and in Syosset, Long Island. According to Tesla, the company currently uses eight New York suppliers in the development and production of its vehicles amounting to over $9.5 million in purchase orders for New York goods and services. Each of Tesla’s service and sales centers add between $7 to 10 million in direct economic activity.
“I have three Tesla facilities in my Assembly District alone, supporting 35 jobs,” said Assemblyman Buchwald. “This bill presents an immediate threat to these men and women who are contributing to the economic growth of Westchester County and the environmental innovation of New York State. We need to be encouraging – not discouraging – innovative ideas to improve our economy and environment. After what occurred in New Jersey, there should be no doubt that passage of this bill would shut down Tesla’s sales ability in New York, just as it is making strides towards giving Americans an alternative to gasoline-based transportation.”
In addition to the showroom at The Westchester Mall, Tesla recently opened a service center and showroom in Mount Kisco.
After participating at the Friday press event, County Legislator Ken Jenkins (D-Yonkers), who owns an electric car, said he planned to introduce two new bills to the Board of Legislators this week. One is a local law that would require at least 20 percent of the parking spaces be readied for EV charging in new or upgraded parking lots around Westchester. The second is the closing of loopholes in a law that presently governs the purchase of county vehicles, guaranteeing that they will be high-mileage, electric, hybrid or alternative fuel vehicles.
