Tesla To Tour State This Week, Pressing For More Dealerships

State Cap Limits Company Owned Dealerships

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ALBANY, N.Y. (WBEN/AP) - Tesla officials traveling across New York this week with a new Model 3 car will argue for a larger presence in the state.

The electric vehicle maker is making stops starting in Albany on Monday as it seeks legislation that would lift the cap on the number of Tesla stores in New York.

The company is having difficulty adding more stores in New York because of state law requiring car sales go through auto dealers.

Tesla will make stops Tuesday through Thursday in Syracuse, Rochester and Buffalo. Local elected officials are scheduled to speak at the event.

Last year, State Assembly Majority Leader Joseph Morelle introduced a bill to lift a cap on the direct-to consumer outlets that Tesla can operate. 

The company does not engage in a traditional dealership model and sells to consumers under a limited model that was approved by the state in 2014. By law, they are restricted from adding more dealerships, because they use no middle-man, and would directly own their sales outlets, compared with traditional dealerships in New York State that are operated by retailers and not vehicle manufacturers. 

But Morelle wants to see the cap lifted, and the company says it would like to  open outlets across New York, including in greater Buffalo.

The proposal would  allow Tesla to operate 15 new sales outlets across the state and mandates that at least one of them be somewhere in  Allegany,  Cattaraugus,  Chautauqua,  Erie, Genesee, Niagara, Orleans and Wyoming counties.

"Tesla is looking for anything it can do to increase the market segment," says Author Lauren Fix, who has done national media appearances on behalf of car manufacturers and dealerships.

She says the direct-to-consumer model is a risk. "If you buy a vehicle from one of our local dealers there are all sorts of protections mandated by the federal government.  Tesla doesn't have that.  It's like you are buying a cell phone or any other piece of electrical equipment," she says.

Fix also argues that local dealerships  employ hundreds per facility, while the Tesla model would have only a few people at each one. 

The bill does mandate that they offer service facilities at each new sales outlet.  A Tesla spokesperson tells the Syracuse Post Standard that each would employ approximately 25 workers. 

In a conference call with reporters last year, Tesla Vice President Diarmuid O'Connell said that the state "state should be a big market for Tesla but the 2014 law has hindered its growth," according to Crain's NY Business

"We sell fewer vehicles in New York than we could or should sell" because of the cap, O'Connell said.

 

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