Direct Auto Sales Bill Fizzles Out in Arizona Senate; Tesla Motors Will Try Again
April 15, 2014 7:00 PM
This could put a damper on the Gigafactory location for Arizona
It doesn't look like Arizona will be at the top of Tesla Motors' list for
Gigafactory battery plant
locations after a recent pro-Tesla bill took a dive.
, a bill that would have allowed Tesla to sell its electric vehicles in Arizona showrooms looks to be over and done with in the state's senate. Arizona Senate Majority Leader John McComish said the bill won’t make it to the floor for a vote this session, which ends in a week.
Unfortunately for Tesla, it will be another year (at the very soonest) before new legislation could be brought forward.
"Eventually, as a result of the dealer led attacks, the bill ran out of time in a legislative session that was dominated by budget wrangling and subsequently cut short," said Tesla. "Tesla is grateful for the organic support we encountered within the Arizona legislature and the broad outpouring of support we received from the citizens of Arizona. We look forward to re-engaging next year."
Bobbi Sparrow, president of the Arizona Automobile Dealers Association, said Tesla's statement isn't true, and added that the bill to allow Tesla's desired business model “is a decades old, failed idea to establish a vertical monopoly that is remarkably both anti-business and anti-consumer."
Elon Musk [SOURCE: NY Mag]
"There is an easy solution for Tesla, which it should be pointed out is selling cars in Arizona, unlike the situation in other states ... They can play by the rules that are serving Arizona well with 28,000 jobs and nearly 25 percent of the state sales tax revenue," said Sparrow.
Tesla has been trying to implement a direct sales model for its EVs, which would eliminate auto dealers altogether. Obviously auto dealers are against this, as it could lead to other automakers doing the same thing and putting them out of a job.
Tesla has had mixed luck in this area. It lost out in New Jersey after Gov. Chris Christie’s administration
banned direct auto sales
in March, but managed to
come to an agreement in Ohio
that allowed Tesla to sell in its two existing showrooms as well as a new third (but no other automakers are allowed to do so in the state).
But Tesla also recently introduced its plan for a Gigafactory plant, which would create its EV batteries. Tesla wants the factory to be placed in a Southwest state where there's plenty of sun for the solar-powered location. The potential locations ended up being Arizona, Texas, New Mexico and Nevada.
It's worth noting that Arizona and Texas are the two that currently ban direct auto sales. It almost seemed as if Tesla was using the factory as leverage, since the chosen state would see 6,500 jobs created as a result. Tesla also said it will invest around $2 billion in the plant through 2020 while investors will pay another $2-3 billion for a total $4-5 billion investment.
While it may seem that Tesla would likely bypass Arizona after this latest event, Sparrow believes otherwise.
“I think Tesla will put their battery factory right where they wanted it from the beginning,” said Sparrow. “It had nothing to do with what was passed in any state.”
“If it’s collectively believed that the smartest place to put a battery factory is in Arizona, then they’ll do so."
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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