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Indiana’s lawmakers are considering legislation that would ban Tesla from selling its innovative and sustainable vehicles directly to Hoosiers. It's all about the free market.
Indiana’s lawmakers are considering legislation that would ban Tesla from selling its innovative and sustainable vehicles directly to Hoosiers. It's all about the free market.
Tesla currently sells directly in 23 states and Washington, D.C. The ability for a manufacturer, such as Tesla, to sell directly to consumers has been in Indiana law since 1991. Tesla has been licensed to sell vehicles in Indiana since 2013. The Indiana Secretary of State has renewed Tesla’s license each year.
For the past two years, other automobile manufacturers and their dealers have attempted to change the law to prohibit Tesla’s direct to consumer model. The groups allege Tesla is operating through a “loophole” in the law and should sell vehicles the same way they do.
Legislative efforts to change the law the last two years have failed. Now, the industry is gearing up for an even bigger legislative push in 2017.
Indiana Code 9-13-2-97 defines a manufacturer as a person who is engaged in the business of manufacturing or assembling new motor vehicles…and sells new motor vehicles to dealers, wholesale dealers, distributors or the general public.
There is one prohibition on direct sales. Manufacturers cannot compete against their affiliated franchisees. Tesla has no franchises, is not a franchisor and has no affiliated dealer.
In addition to saying that Tesla does not follow the law, manufacturers and dealers argue that consumers need additional protections that only the framework of their franchise models can provide.
The dealers and manufacturers argue that Tesla should either sell its vehicles through their franchises or develop the same type of franchise model because it is better for competition and adds layers of consumer protections for buyers.
Tesla is in full compliance with Indiana law. Tesla seeks the same freedom of choice the other American manufacturers had when they chose to franchise in the 1930s and 1940s. Tesla thinks it should be able to choose the business model that best fits evolving consumer preferences.
As it is currently written, Indiana’s law supports economic freedom. It does not stifle consumer choice and innovation. If the law is changed, Tesla will not change its business model. As a result, Hoosiers would travel to other states for car delivery and service.
For the past two years, other automobile manufacturers and their dealers have attempted to change the law to prohibit Tesla’s direct to consumer model. The groups allege Tesla is operating through a “loophole” in the law and should sell vehicles the same way they do. Legislative efforts to change the law the last two years have failed. Now, the industry is gearing up for an even bigger legislative push in 2017.
Indiana Code 9-13-2-97 defines a manufacturer as a person who is engaged in the business of manufacturing or assembling new motor vehicles - and sells new motor vehicles to dealers, wholesale dealers, distributors, or the general public. There is one prohibition on direct sales. Manufacturers cannot compete against their affiliated franchisees. Tesla has no franchises, is not a franchisor and has no affiliated dealer.
In addition to saying that Tesla does not follow the law, manufacturers and dealers argue that consumers need additional protections that only the framework of their franchise models can provide. The dealers and manufacturers argue that Tesla should either sell its vehicles through their franchises or develop the same type of franchise model because it is better for competition and adds layers of consumer protections for buyers.
Tesla is in full compliance with Indiana law. Tesla seeks the same freedom of choice the other American manufacturers had when they chose to franchise in the 1930s and 1940s. Tesla thinks it should be able to choose the business model that best fits evolving consumer preferences.
As it is currently written, Indiana’s law supports economic freedom. It does not stifle consumer choice and innovation. If the law is changed, Tesla will not change its business model. As a result, Hoosiers would travel to other states for car delivery and service.
Is to give Hoosiers the freedom to choose how they buy their vehicles.
Tesla is an American manufacturer of all-electric vehicles that has sold vehicles in Indiana since 2013. It is properly licensed and abides by state laws.
The company opened a store in Indianapolis which contributes more than $10 million annually in direct economic impact.