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Indiana is back with another bill to ban Tesla’s direct sales model

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If a proposed Indiana House bill is passed, manufacturers of “all-electric vehicles” would be banned from selling directly to consumers. The bill does not direct any specific language to Tesla Motors, Inc., but the innovative vehicle manufacturer is clearly the target of the legislation. Add Indiana into the mix of Tesla’s long list of court cases pending in which car dealers and automakers claim that they, as intermediaries, have sole right to sell vehicles to consumers.

Indiana House Bill 1592

Indiana automakers have traditionally used an established network of dealers who negotiate with buyers and provide automotive repair services. These automakers are part of a large umbrella of politically influential groups. They argue that Tesla’s model allows the company to evade laws, which confers an unfair advantage to Tesla and provides no accountability to its buyers.

Here is the synopsis of the Indiana House Bill 1592.

Automobile sales requirements. Provides that a manufacturer may engage in sales directly to the public only if the manufacturer meets certain requirements. Provides that a manufacturer can no longer engage in sales directly to the public after the earlier of: (1) reaching 1,000 units in cumulative annual sales; or (2) six years after the initial dealer’s license is granted.

Additionally, Sec. 20. of the bill reads:

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A manufacturer licensed under this article may engage in sales directly to the general public only if the manufacturer (1) has exclusively offered for sale to the general public in Indiana all-electric vehicles on a continuous basis since July 15, 2015; (2) has never offered for sale to the general public in Indiana a line make of new motor vehicles through a franchised motor vehicle dealer.

Tesla is the only vehicle manufacturer which meets these particular criteria. Tesla sells its electric vehicles directly to consumers, while other manufacturers like General Motors, Ford, Subaru, and Toyota sell through Indiana dealerships. If passed, the bill would severely limit Tesla’s ability as a manufacturer to sell to the public:

Subject to the expiration schedule under IC 9-32-11-12.5, a manufacturer can no longer sell to the public after the earlier of the following: (1) A manufacturer described in this section reaches cumulative annual sales of one thousand (1,000) units to the general public from its licensed location in Indiana.

The author of the bill, Rep. Edmond Soliday, a Republican, has authored or co-authored several transportation bills, including transportation infrastructure funding, automated traffic enforcement, vehicle excise taxes, and department of transportation property matters. He defeated Midwest Environmental Systems CEO Pamela Fish in the November, 2016 elections. House Bill 1592 will be heard by the Roads and Transportation committee.

Last year another Republican, Rep. Kevin Mahan, supported a similar bill that would have forced manufacturers to sell their vehicles through a dealership. “For the average Hoosier, purchasing an automobile can be daunting and a big investment,” Mahan said. “A greater variety of vehicles are now available and can be brought directly to consumers virtually anywhere in the country. In the event of a recall or malfunction, consumers should be protected.”

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Arguments against limiting manufacturer sales

Tesla Motors, Inc.’s Vice President of Corporate and Business Development Diarmuid O’Connell testified against House Bill 1592. “Tesla does not operate through some kind of loophole in Indiana law,” O’Connell said. “The current law is explicit in Tesla’s ability to sell directly and, as written today, it is not broken.” O’Connell’s remarks point to current Indiana law in which an auto manufacturer is not allowed to open a store in direct competition with an affiliated franchised dealer. Tesla has no direct competition franchise dealers in Indiana and has always sold directly to consumers. O’Connell added that Tesla’s presence in Indiana has “brought only good to the consumer welfare without harming anyone — not even the dealers.”

At stake is more than a corporate tug-of-war between automakers. Tesla’s electric vehicles are at the heart of that vision for tomorrow’s consumer domestic transportation and will continue to flourish and change the way automakers in the U.S. and abroad have conducted business as usual.

If “you’re interested in promoting competition and free market principles … you recognize direct distribution, particularly for a company like Tesla, is critically important,” said Todd Maron, the company’s chief counsel, during remarks at a 2016 Federal Trade Commission event. “We don’t simply believe that [electric vehicles] represent a nice complement to gas powered cars. We believe that it’s imperative that they are replaced entirely by electric vehicles.” An end to franchising laws would advance that goal and place low-mileage gas-powered vehicles at risk of obsolescence.

Arguments in favor of limiting manufacturer sales

A coalition of free market groups, led by Americans for Tax Reform President Grover Norquist, argues that ending or restricting automotive franchising would actually decrease consumer choice. Norquist believes that reducing competition among dealers selling the same car brands hurts consumers. Franchising laws were actually created by anti-trust efforts at the Federal Trade Commission and “they sustain market competition rather than undermine it.” Last year, the group accused federal regulators of ignoring evidence that would undermine proposed measures governing automotive sales that stand to enrich what they saw as a “politically-powerful company” at consumers’ expense.

Harry Tepe, owner of Tom Tepe Auto Center in Milan, Indiana, supports legislation that would further protect consumers in the auto industry. “We just want to make sure there are protections in place for the consumers,” Tepe said. “The issue at hand is that the loophole is still open that allows any manufacturer to come in and market a vehicle and sell directly to the public without having any protections in place for the consumer.” He takes the position that dealerships are responsible for being a liaison between the consumer and the manufacturer.

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Lobbying on behalf of the automotive industry

Proponents and opponents of Indiana House Bill 1592 are, in many cases, influenced by a powerful automotive lobby in the U.S. Automotive industry lobbyists use a combination of strategies to gain influence. They do a lot of research, sit down with lawmakers one-on-one, deliver  messages in writing, and call Congressmen and members of the administration on the phone.

“If you’re a big company, like a carmaker, and you’re lobbying lawmakers, you’re almost like a pro sports team. You want to get the big names, the most talented, most knowledgeable people,” said David Levinthal, communications director for the Center for Responsive Politics, a non-partisan research group that tracks the money spent in the U.S. political system and its effect on elections and public policy. “So, these big companies, in the major industries, hire former Congressmen and top Congressional staffers and other high-ranking government officials to be their lobbyists, because those are the folks who know who all the other major players are and they know the ways of Washington.”

 

Source: OpenSecrets.org

 

Carolyn Fortuna is a writer and researcher with a Ph.D. in education from the University of Rhode Island. She brings a social justice perspective to environmental issues. Please follow me on Twitter and Facebook and Google+

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Tesla confirms Robotaxi is heading to five new cities in the U.S.

After launching in Austin, Texas, in late June and the Bay Area of California just a few weeks later, Tesla has been attempting to expand its Robotaxi suite to new states and cities in the U.S., and even outside of the country.

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Credit: Tesla

Tesla Robotaxi will hit five new cities in the United States in the coming months, the company confirmed.

After launching in Austin, Texas, in late June and the Bay Area of California just a few weeks later, Tesla has been attempting to expand its Robotaxi suite to new states and cities in the U.S., and even outside of the country.

The Robotaxi suite is a ride-hailing service Tesla offers, but the details of it change with each jurisdiction, as regulations vary. For example, in Austin, Tesla can operate the Robotaxi suite without anyone in the driver’s seat, as long as the vehicle does not enter a freeway.

Credit: Tesla

In the Bay Area, a Safety Monitor rides in the driver’s seat, essentially acting as the vehicle operator with Full Self-Driving controlling the car.

The local regulations and how Tesla handles them will continue to be a relevant part of the discussion, especially as the company aims to expand the Robotaxi program to different areas. This has been a primary focus of the company for several months, especially within the United States.

CEO Elon Musk said that Tesla was aiming to launch Robotaxi in Nevada, Arizona, and Florida. However, the company detailed five specific cities where it will launch Robotaxi next during the Annual Shareholder Meeting on Thursday.

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Tesla will launch Robotaxi in Las Vegas, Phoenix, Dallas, Houston, and Miami next, broadening its Service Area for the suite to more major cities across the U.S.

It has said it plans to offer the service to half of the U.S. population by the end of the year, but it does not seem as if it will expand to more than a handful of cities this year, which is still tremendous progress, all things considered.

As far as autonomy is concerned, Tesla has always had lofty expectations and has made some even loftier statements.

At the Shareholder Meeting, Musk said that the company would likely be able to enable vehicle owners to text while the vehicle drives, alleviating them from potentially having some of the responsibility they have behind the wheel.

Tesla says texting and driving capability is coming ‘in a month or two’

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It is not confirmed that Tesla will roll this out in the next few months, but Musk said there is a possibility.

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Tesla launches another new Model Y trim at a bargain price with massive range

It is the second most-affordable Model Y trim level in China, trailing the base Rear-Wheel-Drive and coming in under the All-Wheel-Drive.

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Credit: Tesla

Tesla has launched yet another new Model Y trim level, but this time it is in China, and it is at a bargain price.

It also has an insane range rating.

On Friday, Tesla launched the new Model Y Long Range Rear-Wheel-Drive in China, priced at 288,500 yuan ($40,500), an incredible deal considering it is not a stripped-down version of the vehicle like the Model Y Standard.

It is the second most-affordable Model Y trim level in China, trailing the base Rear-Wheel-Drive and coming in under the All-Wheel-Drive.

The big appeal with this new Model Y trim is obviously its price, but its range rating is also one of the best we’ve seen. Rated at 821 kilometers on the CLTC scale, it converts to 510 miles. It uses a 78.4 kWh CATL battery.

Converted to real-world range, however, that 821-kilometer range rated by the CLTC actually is equivalent to about 357 miles on the EPA scale, which is still a very respectable number and comes in at a higher range than the Long Range All-Wheel-Drive configuration that is available in the U.S.

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Tesla has truly brought a wide variety of Model Y trims to the Chinese market, including a new Model Y L configuration that features a slightly longer wheelbase, as well as additional interior features like extended thigh legrests and captain’s chairs with armrests.

It is unclear whether Tesla will bring a Premium Rear-Wheel-Drive option of the Model Y to the U.S., especially as it has already rolled out four configurations of the all-electric crossover in the market. With the new Standard offerings, Tesla will likely keep its lineup as simple as possible.

However, the company has hinted that there is a slim possibility the Model Y L could come to the U.S. sometime late next year, but CEO Elon Musk said that it is not a guarantee.

Tesla is more concerned with self-driving efforts in the U.S., and despite calls from customers for larger vehicles, it does not seem concerned with making them available, at least not for now.

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Tesla Model Y Performance set for new market entrance in Q1

The lightning-fast trim level of the all-electric crossover packs a variety of new improvements, including more range and better acceleration, thanks to aerodynamic improvements and other performance-based changes.

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Credit: Tesla

Tesla’s new Model Y Performance is set to arrive in a new market in Q1 2026, a company executive confirmed on Friday.

The lightning-fast trim level of the all-electric crossover packs a variety of new improvements, including more range and better acceleration, thanks to aerodynamic improvements and other performance-based changes.

It was initially launched in Europe, and then it made its way to the United States. However, it will soon be available in a new market: Canada.

Raj Jegannathan, a Tesla executive, confirmed on Friday that the company would be bringing its Performance trim of the Model Y to the Canadian market early next year:

Interestingly, the Model Y Performances that enter the Canadian market will likely come from Gigafactory Berlin and not Gigafactory Texas, even though it is logistically more advantageous.

There is a 25 percent tariff on U.S.-built vehicles currently, and Tesla has been sending Germany-built Model Y vehicles to Canada to avoid this and keep prices reasonable for customers.

Some Model Y owners in Canada have already confirmed that their units came from the German production facility, not the United States.

Model Y Performance deliveries have not yet started in the United States, but are slated for late November or early December.

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Tesla refined the Model Y Performance’s exterior design with new front and rear fascia designs, a new performance carbon spoiler, 21″ Arachnid wheels and tires, and adaptive damping to help with better handling.

Tesla launches Model Y Performance in the U.S.

There are also new Drive Modes for better control during high-speed driving.

It also packs the same improvements as the new Model Y features over its predecessors, including acoustic glass and premium sound-damping materials for a quieter cabin, and heated and ventilated front sport seats.

In the United States, it is priced at $57,490. It will very likely be higher in Canada due to logistics costs and other factors.

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