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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.
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.
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