Tesla direct product sales bill moves forward in Arizona

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An Arizona Senate committee has pushed forward a bill that would allow electric-vehicle maker Tesla Motors Inc. sell its vehicles directly to customers.

The measure, accepted on a 3-2 vote Wednesday by the Senate Commerce, Power and Military Committee, demands Tesla to have a services center in the state to handle repairs and guarantee issues, the Related Press reported. The bill following goes to one more committee for overview, then to the total Senate. It was unclear when the subsequent action would consider location.

Arizona Senate Majority Leader John McComish known as the bill a “pre-emptive strike” towards long term laws that outlaw Tesla’s direct-sale model.

“What has took place … is that in some states, they are moving to outlaw that sort of operation,” McComish told the Connected Press. “But I think we should be about opportunities for innovation rather than stifling innovation.”

A Tesla spokeswoman wrote in a statement: “We’re pleased with efforts in the Arizona Legislature that could allow clients to purchase electric cars right from Tesla and other EV manufacturers in the state and enjoy the powerful signal of support for American innovation. We look forward to doing work with the 2 the Senate and Assembly to pass this legislation in help of the cost-free industry in Arizona.”

The measure was launched in January in the Arizona House, according to a site posted on Phoenix New Times, and was passed as a bill that “absolutely had nothing at all to do with vehicles at all.” Now, due to the fact of Arizona’s strike-something amendment that enables the text of a bill to be substituted with new language, the measure is currently being revived in the state Senate as a professional-Tesla bill.

Tesla is pushing for approval of its direct-sale model in many states, and has drawn opposition from automobile dealers and associations that represent them.

New Jersey last week moved to block Tesla’s direct-sale model in that state. The New Jersey Motor Vehicle Commission, with members appointed by Gov. Chris Christie, voted unanimously to bar any type of direct automotive revenue in the Garden State.

But not too long ago Arizona was named 1 of the top contenders for Tesla’s planned gigafactory to make lithium ion batteries. Of the 4 states Tesla is taking into consideration for the factory — Arizona, Nevada, New Mexico and Texas — 2 of them, Texas and Arizona, ban direct motor vehicle product sales to consumers.

State Rep. Warren Petersen (R-Gilbert), the bill’;s unique sponsor, known as the measure a “great opportunity … to send a message that we welcome company and we welcome Tesla right here to Arizona.”

All 9 of Arizona’s U.S. Representatives sent Tesla CEO Elon Musk a letter Tuesday asking the automaker to open its new factory in their state, The Arizona Republic reported.

In a report by the Arizona Daily Star, a Tesla lobbyist is quoted as saying, “Arizona is quite considerably in the mix [for the factory]. However, getting stated that, I do not want anyone to consider there is any sort of quid pro quo here, that if you vote for this you’re guaranteeing this, or that if you vote against this you’re guaranteeing that.”

Tesla has explained the factory is estimated to value about $ 5 billion and ultimately employ about 6,500 people.

You can reach Andrew Thurlow at athurlow@crain.com.

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