Tesla Motors has been waging war with the administration of New Jersey Gov. Chris Christie over a ban on the company’s direct sales model in that state and one politician wants to prevent the company from facing a similar fate in New York.
Democratic Westchester County Assemblyman David Buchwald represents a district that includes two of Tesla’s five stores in the Empire State and he’s trying to organize opposition against a proposed bill that would block the company from selling its luxe electric cars directly to consumers.
“They’re a new American manufacturer and we shouldn’t change the rules midstream just as a company’s starting out,” Buchwald told Business Insider in a phone interview Wednesday, later adding, “If we’re ever going to have a chance of moving away from a gasoline-based transportation economy, it’s going to be through giving companies like Tesla an opportunity to succeed.”
Buchwald is holding a press conference today at Tesla’s store in White Plains where he said he will be joined by “a number of other elected officials” and “leaders from the environmental and business communities” who will be announcing their opposition to the proposed ban on direct sales in New York. This ban would require Tesla to sell its cars through franchise dealers. Tesla has argued traditional car dealers do not have incentives to sell its cars rather than traditional gas models while auto dealers’ lobbies in other states have claimed they ensure competitive pricing and serve as better advocates for consumers than manufacturers when it comes to warranties and repairs.
According to Buchwald, his reasons for supporting Tesla are both environmental and economic. He described the company as one that has “created 35 jobs in my state Assembly district.”
There are currently bills proposing to ban direct auto sales in New York in both the state Assembly and Senate. Buchwald said the Assembly bill moved out of committee and is now on the calendar, which means it can now be considered and put up for a vote. However, Buchwald noted the bill got to the same place last year and was put aside at the end of the legislative session without coming up for a vote. He said he does not necessarily expect it to go further this year, but he felt it was important to publicly address the topic because the situation in New Jersey has increased focus on the issue from both voters and opponents of Tesla’s business model.
“It hasn’t, in the Assembly, passed its prior high water mark, but obviously there’s a renewed push this year. So, I thought all the more appropriate to make sure my constituents knew where I stand and I certainly stand on the side of a company that’s created 35 jobs in my state Assembly district,” Buchwald said. “Frankly, this is a topic which publicly has gained a lot of prominence in just the last week. I’ve been opposed to the bill for some time, but obviously, people here in New York have seen what’s gone on across the Hudson River in New Jersey and so I think they’re getting more and more information and that’s always a very good thing when it comes to public policy.”
In New Jersey, Tesla has said it faced “attacks” from the powerful auto dealers’ lobby. However, both Christie and the auto dealers have countered that existing law in New Jersey already prevented Tesla from operating in the state. Buchwald noted there is an “organized group of automobile dealers” supporting the bill to ban direct sales in New York. However, Buchwald said a “difference” between New York and its neighbor on the other side of the Hudson is that current laws don’t bar Tesla from selling its cars directly to consumers.
“There are well set reasons why the rules that are currently in place in New York to protect franchise dealers from manufacturer power. … When these rules were put in place decades ago, there was a very legitimate concern that big auto manufacturers could use their market power to unfairly gain leverage over the dealers who sell their cars and I’m not opposed to the existing laws that are on the books but in New York,” explained Buchwald. “In New York, the current state of affairs is that Tesla is allowed to have its own stores selling Tesla cars. There was a lawsuit … brought by the Greater New York Auto Dealers’ Association. … The court ruled the existing laws do not prevent Tesla from doing what they’re doing here in New York. That’s, in fact, I believe why there’s a push for new legislation.”
Buchwald said he’s communicated with Tesla and the dealers. Though he’s clearly taken sides in their battle, Buchwald believes there can be a “compromise” that addresses the concerns of both groups.
“I believe that there is room for compromise so that a startup company like Tesla is able to succeed in the marketplace while still giving dealers the assurances they need that their entire industry won’t be turned upside down,” Buchwald said. “I don’t think Tesla poses a challenge to the way of life of dealers right now. Right now, Tesla’s percentage of sales … is very small and if the dealers want to make sure that their entire way of selling cars over the last few decades is preserved, I understand that view. But I also think that view shouldn’t be used to stop a new electric car manufacturer that’s already produced jobs here in New York State.”