CT Automotive Retailers Association

HARTFORD, CT — Another General Assembly session has come and gone and Connecticut consumers will still have to travel to Massachusetts or New York to purchase vehicles manufactured by Tesla.

That’s because legislation allowing Tesla to sell cars directly to consumers was never raised for debate. It made it through the Transportation and Finance, Revenue, and Bonding Committees, but was never called for a vote in either chamber.

It’s the third year in a row that Tesla legislation has failed to get through the General Assembly.

“It’s such a complicated issue,” House Speaker Joe Aresimowicz, D-Berlin, said Wednesday.

Aresimowicz said he was reluctant to say that it was the objections of the state’s car dealers, who are subject to the regulations under the state’s motor vehicle franchise system, that killed the Tesla bill.

Tesla wants to undercut investments in Connecticut that 270 franchised auto retailers have made in our communities, by changing state law to carve out an exemption for Tesla — a single company. This legislation is not necessary. Tesla could sell its vehicles at dealerships across Connecticut today, but it chooses not to and wants special treatment.

The new car dealerships throughout Connecticut offer good, high-paying jobs to more than 14,000 employees. Auto retailers have shown consistent job growth over the last five years, adding more than 2,300 jobs since 2012. Beyond the number of career opportunities, dealers offer competitive salaries, benefits and job training. The direct-sales model Tesla is requesting will allow outsourcing of many jobs. If this bill passes, 10 percent of employees at dealerships could lose their jobs.

Tesla claims franchised dealers are unwilling to sell electric vehicles and that Connecticut continues to lose sales tax revenue on vehicles purchased out of state. Sales and use tax is collected on all vehicles when registered in Connecticut. Connecticut dealerships had a 2016 payroll of $814 million and $10.3 billion in total sales — 18 percent of Connecticut’s retail sales — and paid $293 million in income taxes. Connecticut dealerships sold more EVs in 2016 than ever before, 92 percent of all EVs last year.

The long-running fight in the General Assembly between luxury upstart Tesla and the state's auto dealerships is back again, with the electric carmaker saying Connecticut is closing the door to innovation and new technology. 

But the state's auto dealerships — which employ 14,000 people and account for $11.4 billion in sales from Connecticut's auto showrooms — say Tesla is welcome to open an auto dealership if it wants to compete. They argue that Tesla's business model of selling directly to consumers would kill jobs and weaken consumer protections.

Lawmakers are considering legislation that would allow a car manufacturer, in this case, Tesla Inc., to sell directly to consumers and circumvent dealers. The measure, which has failed in the past, was approved this year by two legislative committees, though has not yet been voted on by the House or Senate.

Chip Gengras, president of Gengras dealerships in East Hartford, Meriden and West Springfield, Mass., downplayed Tesla's reputation for innovation. Lawmakers backing the carmaker see it as "shiny and new and they don't understand it," he said.

Tesla's supporters say the state's efforts to promote startup companies, spur business expansion and otherwise rev Connecticut's slow-growth economy are being undermined by politics and protectionist rules. Under state law carmakers generally, may not be issued a dealer's license.

"The state should be encouraging innovation instead of putting roadblocks in the way," said Avi Kaner, a Westport selectman who recently participated in a local Tesla presentation.