Tesla opposes Minnesota legislation that would block its stores
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Tesla Motors is trying to amend Minnesota legislation that would block it from opening stores and service centers in the state.
The legislation, introduced last month at the urging of the Minnesota Automobile Dealers Association, would rewrite Minnesota's franchise law to make it clear that a vehicle manufacturer cannot operate a dealership. Under the state's current law, a manufacturer is prohibited from competing with a same-brand franchised dealer.
In seeking the changes to the legislation, "we are merely trying to preserve our ability to operate," Diarmuid O'Connell, Tesla's vice president of business development, told Automotive News. Electric vehicle maker Tesla is looking to open locations in Minnesota.
Scott Lambert, executive vice president of the dealers association, says the legislation is not aimed at blocking Tesla. It was prompted by members who were concerned about a gap in the franchise law's factory store prohibition.
Lambert said he wasn't aware that Tesla was even planning locations in Minnesota until the vehicle maker contacted him just more than a week ago. Nonetheless, the association doesn't want to see the legislation amended to allow Tesla's operation.
"We're not happy about granting them an exemption," said Lambert. "We've got dealers who have made big investments in their dealerships. A factory-owned store, it's a whole different model, and it's not fair."
An MADA representative and O'Connell were scheduled to testify about the proposed legislation today before the Minnesota Senate's transportation committee. O'Connell also spoke at House and Senate hearings on the bills last week.
When the legislation was introduced, Tesla was negotiating on locations for a store at the Mall of America in Bloomington, Minn., and for a service center in Edina, Minn. The service center is planned to open during the first half of this year. The store wouldn't happen until later, probably 2014, a Tesla spokeswoman said.
Tesla's amendment hasn't been added to the legislation, which must move through more committees before reaching the full Minnesota House and Senate for votes. The House and Senate sponsors of the bills have urged Tesla and the MADA to sit down and try to work out a compromise.
Lambert said he's not "slamming the door on that" but that it will be difficult to craft a middle ground on the matter.
Tesla's O'Connell says he's hopeful of reaching a constructive conclusion.
"The bottom line is, we're anxious to come to Minnesota," O'Connell said. "We think the product is a great match for the market."
You can reach Amy Wilson at awilson@crain.com.
