Tesla awaits OK from governor to sell directly in Maryland

Tesla could be a signature away from direct sales in Maryland, after facing a ban in West Virginia and making efforts to expand in Georgia late last month.

House Bill 235 is under Maryland Gov. Larry Hogan’s review after both the House and Senate approved it late Monday night. Hogan is expected to pass or veto the bill April 28 or May 12, his office said.

The bill, which was supported by the Maryland Automobile Dealers Association, would allow Tesla up to four licenses.

Legislators contacted the dealer association in January to negotiate the terms of the bill.

Delegate Kirill Reznik said: “This situation was incredibly unique. They came to the table as willing partners. I hope other dealer associations around the country look to Maryland and take note.”

Tesla “applauds” the Maryland legislature, Jim Chen, Tesla’s vice president of regulatory affairs said in a statement.

“This legislation confirms the company's ability to bring its direct to consumer sales model to Maryland residents, which brings it in line with virtually every other state,” he said. “We now look forward to Governor Hogan signing this bill into law shortly and demonstrating that Maryland is indeed open to new business and high tech innovation.”

The bill stipulates that a manufacturer or distributor can be licensed as a vehicle dealer if it sells only electric or nonfossil-fuel burning vehicles.

Maryland shares borders with Pennsylvania, Virginia, Delaware, West Virginia and Washington, D.C. It is also close to New Jersey.

Peter Kitzmiller, president of the Maryland Automobile Dealers Association said: “The exception is intended to apply to Tesla only. [Including the condition] definitely was the best way to do that.”

Reznik, who authored and sponsored the bill, said he doesn’t think the dealer association would have responded as positively if the bill did not include that stipulation.

“Whenever you have somebody trying to break into a market that has existed for years, it’s always very difficult,” Reznik said. The bill “really provides Tesla the opportunity to come into the market and be able to play on what is otherwise an even playing field.”

But Kitzmiller said that Maryland dealers still support the franchise system most.

“I believe that [Tesla is] going to need to appoint dealers at some point, and when they do that this exception will go away,” he said.

About 600 Tesla vehicles have been registered in the state over the last three years; about 280 were registered last year, Reznik said.

“We have a fair amount of money and a lot of people willing to spend that money, and we are very environmentally conscious,” he said.

Reznik is confident that Hogan will sign the bill.

“In the waning days of the session, he had actually gotten involved in helping to move it along,” he said. “He wouldn’t have done that if he didn’t support the legislation.”

Maryland is the latest state to grapple with Tesla legislation. Neighboring West Virginia passed a franchise update earlier this month that effectively banned Tesla from selling directly to customers in the state. Tesla, however, scored a victory in Georgia last month and a bill allowing it to expand there is awaiting Gov. Nathan Deal's signature.