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SALT LAKE CITY — If you’ve ever considered going electric and buying a Tesla, the timing’s never been better — at least in Utah.
A new house bill that went into effect Tuesday now allows Tesla and other carmakers of electric or hydrogen-powered vehicles to own and operate car dealerships in the Beehive State.
Tesla was previously prohibited from doing so under a state law that barred car manufacturers from owning dealerships. The law was originally intended to ensure that large carmakers like Ford, General Motors or Chevrolet weren't pushing out independent dealers, but it didn’t quite work with Tesla’s business model.
Tesla argued that having its own dealership was crucial to its business model because a sale depended on convincing customers that electric cars are better than gas-powered ones. But though the company was allowed a showroom in Salt Lake City, any Utahn who wanted to buy a Tesla was required to go out-of-state to purchase.
“Tesla sells its cars directly to customers to educate them on our technology and ensure the best possible customer experience. The passing of (the house bill) is a win for Utah consumers who can now purchase a Tesla in their home state," Tesla said in an emailed statement.
The company had tried previously to set up a dealership called Tesla UT and apply for an auto dealer license, but the Utah Supreme Court shut down the company’s efforts in April 2017 because Tesla UT was owned by Tesla.
Tesla argued that, though the state law was initially designed to protect independent dealers, it protected a monopoly by locally powerful car dealerships and violated free-market economic policies in the state constitution.
The house bill, sponsored by Rep. Kim Coleman, R-West Jordan, is now tailored to newer companies like Tesla that have different business models and will allow the carmaker to operate a dealership to a certain point.
“The challenge we had was that the various stakeholders, including Tesla and their business people, consumers, the Automobile Dealers Association, new car dealers, used car dealers, consumer protection groups and all these different folks had different ideas of what a new model ought to look like,” said Sen. Curt Bramble, R-Provo, the bill’s floor sponsor. “So it took us literally a couple of years (to pass this bill).”
The legislature will try to continue accommodating companies with new business models that may not work with past legislation, Bramble explained.
“There has to be a balance between protecting consumers, protecting the local businesses and providing the opportunities for the manufacturers or the producers of the vehicle,” he said. “That’s a hard-fought balancing act that we need to maintain.”