Tesla Enjoys Extension In Indiana Bill With Direct Sale Model

Tesla can directly sell its luxury cars to its customers in Indiana for at least a year due to delay in bill.

Last week, Tesla was on the verge of suffering from a major setback when talks about a proposed bill, which would have rebuked Tesla’s license of “direct dealership” in Indiana, hit the streets. The luxury electric carmaker can now take a sigh of relief for as long as a year as the bill, which it accused General Motors for putting the pressure on the Senate, has been delayed for a year. Hence, at least for a year now, it can sell its premium electric cars directly to consumers.

For several years, the company has been under a lot of criticism and opposition relating to its practice of direct sales. More recently, General Motors, in collaboration with local auto dealers, took the lead in trying to influence the government for bringing about alterations in the legislation to deter the auto-tech titan to carry out its direct sales methodology.

In compliance with the existing law of Indiana, the sellers can sell electric vehicles directly to customers without the inclusion of any third-party dealerships. Had the amendment in the Indiana Senate bill been carried out, Tesla would have to be deprived of direct sales to customers. The bill would have been in effect from 30 months after the date of issue, which would tentatively have been by the end of 2017.

The bill, related to auto dealer regulations and licensing, is still under discussion. The bill itself does not hold much gravity for the direct sales methodology. While appreciating Indiana senators after they removed the language, Todd Maron, Tesla General Counsel, expressed, “Existing Indiana law supports free markets by providing a level playing field for all manufacturers.”

Although the license paves the way for the company to set up stores in the state, numerous auto dealers fear that the direct consumer sales model would allow the manufacturers to cut the auto dealers out of the sales process. Tesla earlier stated that a car could not be sold if maintenance and other services are not provided to the consumers, which auto dealers cannot provide. Nevertheless, the company has to gear up against the battle of rights between the local dealers and itself.

To express its point of view, GM said that it wants Tesla to come across the same regulations and restraints, which GM is going through pertaining to the inclusion of independent dealers during the sale process. According to state franchise laws, those manufacturers, who happen to have independent franchisees, are abstained from executing their manufacturer-owned stores.

GM said, “We will continue to work on this issue in Indiana and nationally and will continue to express our concern anywhere we find market participants are operating under different rules.”