Pro-Tesla bill appears dead in Arizona Senate

TESLA V. DEALERS
TESLA V. DEALERS
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A bill that would have allowed electric-vehicle maker Tesla Motors Inc. to sell cars at its factory-owned showrooms in Arizona appears to be dead in the state’s Senate. But Tesla vowed today to continue "re-engaging" the Legislature next year on the matter.

The bill won’t make it to the floor for a vote this session, which will end in about a week, Arizona Senate Majority Leader John McComish told The Wall Street Journal. This means it would be another year at the earliest before new legislation could be debated.

Bobbi Sparrow, president of the Arizona Automobile Dealers Association, on Monday said the bill’s likely failure will not affect the state’s bid for a massive new Tesla battery plant.

“I don’t think legislators thought that if they passed or didn’t pass the legislation that it was going to have anything to do with the battery factory,” Sparrow said.

Tesla response

Tesla, in a blistering statement today, blamed the Arizona dealers for the bill's demise. The statement said the association "resorted to aggressive and draconian tactics" to defeat the legislation, "ultimately threatening to spend freely in the next electoral cycle to punish supporters of this free-market legislation."

"Eventually, as a result of the dealer led attacks, the bill ran out of time in a legislative session that was dominated by budget wrangling and subsequently cut short," the statement said. "Tesla is grateful for the organic support we encountered within the Arizona legislature and the broad outpouring of support we received from the citizens of Arizona. We look forward to re-engaging next year."

Sparrow responded: "There isn’t a part of that statement that is true." She said the few advocates of special legislation for Tesla in Arizona “have no one to blame but themselves.”  

“It is a decades old, failed idea to establish a vertical monopoly that is remarkably both anti-business and anti-consumer,” she said. 

"There is an easy solution for Tesla, which it should be pointed out is selling cars in Arizona, unlike the situation in other states ... They can play by the rules that are serving Arizona well with 28,000 jobs and nearly 25 percent of the state sales tax revenue.”  

Battery factory contenders

Of the four states Tesla is considering for the factory -- Arizona, Nevada, New Mexico and Texas -- two of them, Texas and Arizona, ban direct vehicle sales to consumers.

McComish told The Journal that the legislation’s likely failure doesn’t help the state’s chances to land the battery plant.

Tesla has said the factory is estimated to cost about $5 billion and ultimately employ about 6,500 people.

Sparrow did not speculate on Arizona’s chances to get the battery plant, but said that Tesla’s “PR firm was trying to link that argument into the legislative session.”

“I think Tesla will put their battery factory right where they wanted it from the beginning,” she said. “It had nothing to do with what was passed in any state.”

“If it’s collectively believed that the smartest place to put a battery factory is in Arizona, then they’ll do so,” she said.

The news comes nearly a week after Washington Gov. Jay Inslee signed a bill that allows Tesla to continue operations in the state and expand beyond its two stores in Seattle and Bellevue.

New Jersey update

Last month, New Jersey passed a regulation requiring new-car dealers to get franchise agreements in order to receive state sales licenses. As of Wednesday, Tesla will no longer be able operate as a store in the state, spokeswoman Alexis Georgeson said in an e-mail today.  

“Tomorrow our two locations at Short Hills and Garden State Mall will open as galleries,” where vehicles can be displayed but not sold, Georgeson wrote in the e-mail.

You can reach Andrew Thurlow at athurlow@crain.com.


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