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CAR DEALERS BEWARE? Proposed Pa. bill would let manufacturers sell eco-friendly vehicles directly to consumers

The Scott Family of Dealerships on Lehigh Street in Allentown, where president Andy Scott also serves as chairman of the Pennsylvania Automotive Association board of directors. - (Photo / Kendall Vrana)

Manufacturers of zero-emission vehicles, such as Tesla Motors, could be allowed to expand their abilities to directly sell cars to consumers in Pennsylvania.

Manufacturers of zero-emission vehicles, such as Tesla Motors, could be allowed to expand their abilities to directly sell cars to consumers in Pennsylvania.

If the state approves new legislation, car buyers for the first time will be able to walk into a retail facility owned and operated by a manufacturer and buy a vehicle, removing franchised auto dealers from the car-buying experience.

It’s a new business model that could open doors for other electric vehicle manufacturers seeking to sell directly to consumers.

In New Jersey, the Assembly recently passed a bill that would do just that, re-creating the direct-sales business model practiced by Tesla, headquartered in the U.S. in Palo Alto, Calif. The bill would allow zero-emission vehicle manufacturers, including Tesla, to operate up to four retail locations statewide with at least one of the facilities also offering vehicle service.

The New Jersey bill needs Senate approval before it would head to the governor.

In Pennsylvania, a similar bill passed the Senate and is in the House of Representatives but tabled, according to Bill Evans, chief of staff for state Sen. Judy Schwank, who represents Berks County. Potentially, the House could take action on the bill in the fall, Evans said.

According to Pennsylvania Senate Bill 1409, sponsored by state Sen. John Rafferty, who represents Berks, Montgomery and Chester counties, the bill would allow zero-emission vehicle manufacturers to operate at up to five retail locations statewide. This bill would not require Tesla and other zero-emission vehicle manufacturers to meet any conditions – such as dealership franchise laws – besides existing state licensure requirements, according to a memo from Rafferty.

The state would continue to license and oversee Tesla and ensure its compliance with state laws, just as it does for all other manufacturers and dealers in the state, Rafferty said in a memo.

Tesla Motors already has a state-approved retail space in the King of Prussia Mall where buyers can look at a model car and buy it off the Internet from the manufacturer.

Andy Scott, chairman of the Pennsylvania Automotive Association board of directors, described the bill as a compromise in that Tesla would only get five retail locations. His organization represents about 900 franchised new-car and heavy duty truck dealerships in the state.

Brian Pedersen
Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 4108.

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