The day may be near when you can buy a new Tesla at a dealership closer to home.
House members late Monday night gave HB369 unanimous (71-0) approval and sent it to the Senate for final action.
HB369 would permit Tesla to own and operate car dealerships in the Beehive State — something that has been barred under state law that prohibits carmakers from having a direct ownership interest in any new-car dealership.
Tesla’s attempts to open a dealership have been swatted down by the Utah Attorney General’s Office.
HB369 is sponsored by Rep. Kim Coleman, R-West Jordan, who has been battling for two years to allow a Tesla dealership, which she sees as a job-creation and free-market move.
Feb. 28: Legislative committee endorses bill that would clear roadblock for Tesla to sell new cars in Utah
Tesla may be one step closer to the legislative victory it needs to finally start selling cars in Utah.
The House Business and Labor Committee on Wednesday voted 8-1 to advance HB369, which would allow Tesla to own and operate car dealerships in Utah.
Tesla opened its first Utah dealership in 2015 but had to quickly downgrade its store to a service center after the Utah Attorney General’s Office ruled that the dealership was in violation of state law.
Under the Motor Vehicle Franchise Act, Utah supports a franchise model that stipulates manufacturers are unable to have direct ownership interests in any new dealerships. Because of the law, Tesla’s repeated bids to gain a license to sell vehicles have been rebuffed.
The company attempted to work around this law and sell vehicles through a subsidiary known as Tesla UT, but this too was found to be in violation of the Franchise Act. The company appealed its case to the Utah Supreme Court to no avail.
However, HB369 — now headed to the full House — would designate Tesla a direct-sales manufacturer and free it from the stipulations of the Franchise Act.
“This bill simply creates a pathway for direct-sales manufacturers,” said Craig Bickmore, executive director of the Utah Auto Dealers Association.
Some supporters view the change as increasing opportunities for business and jobs.
“We have some companies right now that are innovative and that we would like to have as part of Utah’s business portfolio,” said bill sponsor Rep. Kim Coleman, R-West Jordan. “We want to welcome these manufacturers to our state.”
Others called for repeal of the Franchise Act altogether.
The lone dissent to HB369 came from Rep. Curt Webb, R-Logan, who voiced concerns that wording in the bill would favor Tesla but prohibit other similar manufacturers from being granted the same status.
“If you pick out one manufacturer and say, ’You can do this and the others can’t,’ I am not sure that will hold up in court,” said Webb.