Tesla Rejects Compromise That Would Have Let it Sell Cars in Utah

A legislative deal that would have let Tesla sell cars direct in Utah was rejected by the automaker because of a stipulation that it could not stock cars in state, and must ship them to individual buyers.

As such, efforts to strike a compromise over proposed legislation, HB384, were ceased by Rep. Kim Coleman, R-West Jordan who has tried to find a workaround to laws requiring manufacturers sell under third-party dealers.

The lawmaker made the news last July over H.B. 394 which nearly did not survive a committee vote before being rejected on the House floor with a vote of 32-41.

Last year also, Tesla had just built a $3 million showroom in Salt Lake City prior to permission to sell as it wished, but abandoned plans for a March grand opening.

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The automaker did this, it was explained, because it was required to invest in state before applying for permissions.

With this week’s defeat by Utah’s House, Coleman said she would continue for the next several months researching and talking with stakeholders on how to amend the state’s franchise laws.

“I believe this is the best bill we’ll ever get,” she said before quitting the fight for now. “Because we still do have problems in defining the scope and meaning of ‘sell,’ it’s a significant hang-up, and I’d like to study this — and really study this — in the interim.”

Todd Maron, Tesla’s corporate counsel said Tesla is not to blame for the inability to reach an agreement.

“I think the fundamental problem is, as Representative Coleman explained, people at the negotiating table wanted for us to not be able to sell cars in the state of Utah. They wanted to dictate the terms their competitors would be able to sell cars,” he said. “In that dynamic it’s very difficult to reach an agreement. At points we were very close to an agreement, but when pen got put to paper … there wasn’t a deal to be had that was good for consumers in the state of Utah.”

Tesla may be holding out for more also because it has a lawsuit challenging the Utah dealer law that is pending before the Utah Supreme Court.

Rep. Brad Wilson, R-Kaysville, who’d just come from the negotiating table after more than a year of attempting to carve an exception for Tesla and other automakers said he was somewhat frustrated.

“I’m a little frustrated that it has been characterized that Representative Coleman and the Legislature are trying to do something to harm Tesla when, in fact, when we started this journey over 15 months ago, it was just the opposite,” said Wilson.