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Tesla says new law meant to keep them out of state

On Behalf of | Jun 16, 2017 | Business & Commercial Law

On June 6, the governor of Louisiana signed a bill into law that will keep auto manufacturers from selling their vehicles directly to buyers. Senate Bill 107, which was sponsored by Sen. Mack “Bodi” White, R-Baton Rouge, will strengthen other legislation meant to do the same thing. According to Tesla, though, the bill was nothing more than a move by special interests to keep the company from moving into Louisiana.

Tesla’s spokesperson said, “Tesla wants to invest tens of millions of dollars in Louisiana, add hundreds of jobs, and make significant contributions to local and state tax revenue. All we’re asking is the right to serve our customers here.”

Automakers in the U.S. have sold their vehicles through franchisees or independent dealers. However, Tesla’s business model is different. Consumers can buy their vehicles direct from Tesla’s showrooms and service locations.

The president of the Louisiana Automobile Dealers Association said the legislation will keep auto sales for local dealers, which he says will create more jobs. He also said that Tesla’s business model gets around that, but Tesla doesn’t agree. The president also said, “Tesla has incorrectly painted it as a move … to prevent them from coming to the state. We want them to come. We want them to partner with a local dealer.”

Louisiana is not the only state that appears to be trying to keep Tesla from doing business in their state. Currently there are six other states where Tesla is restricted in some way from selling its vehicles directly to consumers.

When businesses find themselves in the middle of disputes, whether with other companies, individuals or even state governments, experienced legal teams are needed to protect their interests. If your company is in a contract dispute or other type of business legal matter, an attorney can provide the information you need about your legal options.

Source: Greater Baton Rouge Business Report, “Will new Louisiana law protecting auto dealers keep Tesla away?,” Sam Karlin, June 06, 2017