State Senate OKs revised bill that puts limit at 5

Cap on Tesla Pennsylvania stores closer

State Senate OKs revised bill that puts limit at 5

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Pennsylvania is halfway to placing a cap on the number of stores that Tesla Motors Inc. can open in the state, muting legislation that helped spark a confrontation between dealers and other automakers.

The Pennsylvania Senate unanimously passed the bill last week after it was amended to cap the number of allowed factory-owned stores at five. The bill, which is worded to apply only to electric vehicle maker Tesla, moves to the Pennsylvania House for consideration.

The original bill had no cap on the number of outlets allowed, which drew the ire of the Alliance of Automobile Manufacturers, a trade association representing 12 automakers but not Tesla.

Alliance officials had charged that the original bill, supported by the state's dealers association, would give Tesla an unfair advantage over traditional automakers. And if dealers signed off on unrestricted direct sales for Tesla, then all automakers should be able to sell directly in Pennsylvania, alliance officials had said.

Devlin: "Some give and take"

The amended legislation could "possibly" earn the alliance's endorsement, a spokesman said. "We support the current cap figure as it is in line with neighboring states," alliance spokesman Dan Gage wrote in an e-mail.

Recent compromises have been reached that capped the number of Tesla-owned stores to three in Ohio and five in New York. Legislation in New Jersey would limit Tesla to four factory-owned stores in that state.

John Devlin, president of the Pennsylvania Automotive Association, which represents the state's dealers, said his organization supports the compromise passed by the Senate.

"Legislators did a good job of giving everyone something," Devlin wrote in an e-mail. "It always requires some give and take." 

The dealers association leaders believe current laws already prohibit direct factory sales, Devlin said, but after seeing the tide of public and political opinion favor Tesla in other states, they decided to exempt Tesla in order to preserve overall franchise protections. The new legislation would strengthen restrictions on factory-owned stores in case another manufacturer tried to challenge it later.

You can reach Amy Wilson at awilson@crain.com.


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