Auto Alliance Opposes Tesla Bill in Pennsylvania

Jun 10, 2014 04:18 PM EDT | Jordan Ecarma

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The largest auto industry trade group in the country has opposed a bill that would further Tesla Motors' sales model in Pennsylvania, saying Tesla should not be allowed to sell directly to consumers if other car companies can't do the same.

The Palo Alto, Calif.-based carmaker, whose Model S sells for around $70,000, has been battling New Jersey, Arizona and Texas to be able to sell cars directly to customers instead of through dealerships. Tesla has one dealership in Pennsylvania with another in the works.

The Alliance of Automobile Manufacturers, which represents nearly all big carmakers in the U.S., not including Tesla, was previously neutral in the battle of Tesla versus various states.

But the trade group has opposed new legislation, proposed by Republican state Sen. John Rafferty Jr., the chairman of the Transportation Committee, that would open the door for just Tesla to conduct its direct sales model in Pennsylvania, The Wall Street Journal reported.

"Automakers have not objected to special provisions in various states that allowed Tesla to operate outside the current dealership system because those provisions were very limited," the Alliance said in a statement, as quoted by WSJ. The "provisions" mentioned are in reference to agreements struck in Ohio and New York, which set a limit of a few dealerships in the state, according to WSJ.

"This bill is different," Alliance stated. "The Pennsylvania bill provides a wide open door for a single automaker to escape state franchise laws, even when that automaker is the sales leader in its product segment."

Pennsylvania's current laws don't prohibit Tesla from opening its own dealerships; the trade group's concern is that the bill will require all other companies to have franchised dealerships, giving special favor to one automaker.

The proposed legislation would allow companies "trading solely in electric vehicles" to open their own dealerships, a description that currently only applies to Tesla.

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