Tesla Accuses GM Of Pushing Bill To Keep It From Selling Cars In Indiana

Feb 25, 2016 12:16 PM EST | John Nassivera

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Tesla continues to face problems with its practice of directly selling its electric cars, as the automaker is now accusing General Motors of convincing lawmakers in Indiana to develop a bill that would end the sales model in the state.

The Palo Alto-based company has sent a letter to "Tesla Owners and Enthusiasts" in the Indiana area, asking them to defeat the bill, entitled Indiana House Bill 1254, which would prevent Tesla from directly selling vehicles from its current storefront in Indianapolis to its customers, according to Ars Technica.

Under the new law, manufacturers wouldn't be able to hold a dealer license after Dec. 31, 2017. Tesla currently has this kind of license and needs it to sell its own cars, but it doesn't work with a third-party dealer.

As a result, Tesla would have to sell its products under the dealership model in accordance with state franchise laws, preventing the company front separating itself from other dealerships in Indiana, RT reported. The letter notes that the current law "allows ANY manufacturer to apply for a dealer license without the use of independent franchised dealers."

Todd Maron, general counsel for Tesla, believes that GM is trying to push the electric carmaker out of Indiana in order to avoid competition.

"Despite having a lawfully granted license to sell Tesla vehicles directly since 2014 at the Fashion Mall at Keystone; despite contributing over $42M to the state through the purchase of parts and components from Indiana suppliers; and despite plans underway to construct a 26,000 square foot Tesla Service facility that will employ approximately a dozen Indiana residents and serve our customers, GM is pushing the Senate Committee to shut out Tesla," the letter reads.

Tesla has yet to provide proof that GM actually authored the bill, Jalopnik noted. GM hasn't provided proof against the claim, but it did release a statement showing its support for the bill.

"GM supports HM 1254. GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products," the Detroit-based automaker said in the statement.

"Tesla could open a franchised dealership with an independent operator in Indiana today, but instead they insist that the State must first provide them with unique rules and special exceptions to suit their own business interests," GM added.

Tesla's direct sales practice has been met with several bans from states like Michigan, Arizona, West Virginia and Texas, according to RT. However, the automaker's sales model faces less problems in other states, such as New Jersey, which reversed its direct sales ban last year.

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