Tesla Tells Owners That GM Wrote A Bill To Stop Them From Selling Cars In Indiana

Illustration for article titled Tesla Tells Owners That GM Wrote A Bill To Stop Them From Selling Cars In Indiana

Tesla’s usual back and forth drama about its no-dealership/direct sales model has taken a turn as the company claims that General Motors specifically is out to quash their business.


The news comes to us from Ars Technica, which turned up a letter sent from Tesla to Tesla owners in Indiana. The letter, reposted on Tesla’s forum, alleges that General Motors “authored and pushed” bill HB1254, which will outlaw a carmaker from holding its own dealer license. That’s what Tesla uses to sell its own cars:

Tesla Owners and Enthusiasts:

We need your help. Yesterday, the Indiana Senate Committee on Commerce & Technology held a hearing on a bill that would shut down Tesla in the state. Authored and pushed by General Motors, HB1254 with amendment 3 would prohibit any manufacturer from being able to hold a dealer license after December 31, 2017. Existing law allows ANY manufacturer to apply for a dealer license without the use of independent franchised dealers. 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.

Here’s how you can help: please contact your local Senator – and if you live in one of the districts covered by any of the following Committee members, we urge you to reach out and let them know they should not shut out Tesla. You can find your Indiana legislators here.

Chairman Buck: Senator.Buck@iga.in.gov , (317) 232-9466
Senator Merritt: Senator.Merritt@iga.in.gov, (317) 232-9533
Senator Delph: Senator.Delph@iga.in.gov, (317) 232-9541
Senator Head: Senator.Head@iga.in.gov, (317) 232-9488
Senator Houchin: s47@iga.in.gov, (317) 232-9814
Senator Leising: Senator.Leising@iga.in.gov, (317) 232-9493
Senator Tomes: Senator.Tomes@iga.in.gov, (317) 232-9414
Senator Breaux: s34@iga.in.gov, (317) 232-9534
Senator Broden: s10@iga.in.gov, (317) 232-9849
Senator Randolph: s2@iga.in.gov, (317) 232-9432

A follow up hearing will be held next Thursday, February 25, 2016, at the Capitol building. Let your voice be heard before that hearing to let them know that Indiana should encourage innovation, economic growth and consumer choice. Don’t let GM tell you that your only option is to buy a car from a traditional franchised dealer by shutting out Tesla.

Thank you for your support and willingness to help Tesla stay and grow in Indiana. As always, when communicating with legislators, please be polite and respectful. Personal attacks should be absolutely avoided, as they will only hurt our cause!

Ars Technica reached out to both Tesla and GM. Tesla did not provide any proof that GM in fact authored the bill.

GM, however, did not provide and proof against the claim. Instead they sent this note of support for the bill:

GM supports HB 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.

A benefit of a nationwide network of thousands of dealerships is that General Motors customers never have to worry about driving to another state to buy, service or support their vehicles.

Tesla’s insistence on special rules could result in multiple manufacturers competing with similarly capable vehicles and similar price points, yet operating under a different set of rules.

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. In fact, Tesla was willing to agree to a dealer model in Virginia. The Indiana legislature shouldn’t create a special exemption for them here.

It’s moronic to fight Tesla so hard on this, particularly since Tesla is willing to enter the dealership game itself to test the limits of the legal restrictions like the ones proposed in this Indiana bill.

I just don’t know if any of the people going up against the direct-sales model know how much people loathe car dealerships.


Photo Credit: Tesla (their Oak Brook, IL location is pictured)

Contact the author at raphael@jalopnik.com.


Grinding Gears

I don’t understand why people hate the dealership model. If Tesla sells the product themselves you’ll only be able to buy it from them. Dealerships have to compete with other dealerships that sell the same car. Without independent dealers you’re going to be forced to pay MSRP on everything because you’ll have no other dealerships to bargain with.

Not to mention they’re taking money from small business owners that run dealership networks and instead keeping all the money themselves. It’s a big business attack on small business. It’s just as bad as Wal Mart moving in and running all the Mom and Pops out of town.

I understand that dealerships have a bad reputation and they’re easy to paint as the bad guy, but take a step back, set your prejudices aside, and think about what’s actually happening here. This is a losing proposition for both the consumer and small business owners.