Tesla's Musk thanks Minn. legislators for stalling franchise law rewrite
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Tesla CEO Elon Musk thanked a Minnesota Senate committee for its effort, but the state House could still move the legislation. |
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Tesla Motors CEO Elon Musk is thanking Minnesota lawmakers who blocked legislation that would prevent the electric vehicle maker from opening stores in that state. But the legislative tussle is far from over.
Musk tweeted his thanks today. The state Senate committee’s vote on Wednesday was a setback for the Minnesota Automobile Dealers Association, which backed the legislation.
But a Minnesota House bill is still active, and a House committee will hear testimony next Wednesday on that legislation. The dealers association is urging its dealers to contact House committee members and urge support of the association’s position.
The bill would revise Minnesota’s franchise law to make it clear that a vehicle manufacturer cannot operate a dealership. Under current law, a manufacturer is prohibited from competing with a same-brand franchised dealer.
“We thought it was a simple clarification bill,” said Scott Lambert, executive vice president of the dealers association, who noted that the Alliance of Automobile Manufacturers pledged neutrality on the legislation. “We’re surprised to have this much controversy surrounding it.”
Representatives of the dealers association and Tesla plan to testify at next week’s hearing. Tesla is seeking an amendment to the bill that would allow it to open stores in the state.
“We’re going to continue to work to make our case,” Tesla spokeswoman Shanna Hendriks said.
When the legislation was introduced in February, Tesla was negotiating on locations for a store at the Mall of America in Bloomington, Minn., a Minneapolis suburb, and for a service center in nearby Edina. The service center is scheduled to open during the first half of this year. The store probably wouldn’t open until 2014.
Lambert said the dealers association wasn’t even aware of Tesla’s interest in the state when it put together the legislation. The association opposes Tesla’s proposed amendment.
Loan repayment
Separately, Tesla -- which received $465 million in U.S. Energy Department loans to develop and build electric cars -- will repay the funds five years ahead of schedule in a plan recently approved by the government.
The carmaker said in its annual report on Thursday that the department approved amended terms of the loan agreements that enable it to complete repayment by December 2017. Starting in 2015, Tesla will make accelerated payments from excess free cash flow, Chief Financial Officer Deepak Ahuja said in a telephone interview with Bloomberg.
“Any remaining balance that’s there at the end of 2017 we’ll pay off as a balloon payment,” Ahuja said Thursday.
Musk said last month said Telsa would agree to the accelerated payment plan.
Bloomberg contributed to this report.
You can reach Amy Wilson at awilson@crain.com.
