Tesla has one store in Pennsylvania, another one coming soon, and last week the Pennsylvania State Senate capped the number it will be permitted to open to five.
The compromise legislation came at the behest of … are you waiting to read “car dealers?” … the Alliance of Automobile Manufacturers.
This is a trade group that represents 12 automakers, but Tesla is not one of them. Actually, if you’d guessed car dealers, you’d be correct anyway, as the Pennsylvania Automotive Association representing the state’s car dealers is aligned in sentiment with the manufacturer group.
The legislation is worded to allow only Tesla the right to sell factory direct, and originally had no restrictions on number of dealerships it could open.
Objections by the Alliance of Automobile Manufacturers centered around the idea that if Tesla is permitted to sell direct then the other automakers should too.
Their read on pre-existing Pennsylvania law – despite the fact Tesla has one store open in King of Prussia – is that factory direct ownership should be prohibited.
Seeing the political fallout in other states, not least of which being next-door New Jersey, the auto manufacturer, dealers, and legislators decided to cut a deal and let Tesla sell factory direct to a point.
Pennsylvania’s new pro-Tesla legislation is similar to deals struck in Ohio – three Tesla store limit – and New York – five Tesla store limit.
Dealers have said they only want a level playing field, as have manufacturers. Dealers are on guard against potentially strong-arm tactics by manufacturers, and legislators still give some weight to the public safety arguments a layer of dealers are said to provide.
There is no secret that automakers and dealers are attempting to protect businesses they’ve invested millions in, but the nuance of issues has lawmakers still siding with them.
We wrote a series delving into the many issues at hand called Tesla vs. the Auto Franchising System.
Tesla’s next Pennsylvania store is in Devon – only a few miles from the Tesla’s store at the King of Prussia Mall – and in the affluent suburbs leading out from Philadelphia along Lancaster Avenue called “The Main Line.”
A number of other luxury car sellers including Mercedes-Benz, Infiniti, Ferrari, and Maserati are within several miles of Tesla’s newest location in a region that boasts some folks who have the highest household incomes in the state, if not also the country.