Battle between car dealers, Tesla cranks up again

The long-simmering feud between Georgia’s automobile dealers and California-based Tesla Motors, a manufacturer of high-priced electric vehicles, has flared up again within the halls of the state revenue department.

Lawyers for the Georgia Automobile Dealers Association (GADA), which represents more than 500 car sellers, filed a petition with the revenue department last Friday asking it to revoke Tesla’s license to sell its vehicles in Georgia.

The GADA petition contends that Tesla, which is allowed to operate as its own dealer here under an exemption in state law, is violating the Motor Vehicle Practices Act by, among other things, exceeding the limit of 150 vehicles it is allowed to sell annually.

“Tesla is a single manufacturer which has sold more than 150 vehicles in the United States during this calendar year and, in fact, has sold more than 150 vehicles in Georgia alone since it began operating in Georgia less than a year ago,” GADA states in its petition for enforcement.

“For these reasons, Tesla is a manufacturer engaged in the sale of new motor vehicles to customers in violation of the Georgia Motor Vehicle Franchise Practices Act and to the detriment of GADA’s members,” the petition alleges.

A Tesla spokesperson said the company was in “full compliance” with Georgia law.

“The petition filed by the Georgia Automobile Dealers Association is nothing more than a thinly veiled attempt to stifle new innovation and eliminate consumer choice by trying to establish a monopoly that restricts the way consumers can buy new vehicles,” said Alexis Georgeson.

“As with similar battles in other states, Tesla will use all means necessary to defend itself and the rights of consumers to decide how and where they spend their hard-earned money,” Georgeson said.

GADA has asked Revenue Commissioner Doug MacGinnitie to hold an administrative hearing and issue an order revoking Tesla’s dealer license and “prohibiting Tesla from engaging in any further action to sell or offer for sale its new motor vehicles to customers in Georgia.”

“This petition is simply asking for the law to be enforced equally, without showing preferential treatment toward anyone,” said Derrick Dickey, a spokesman for GADA.  “Selective enforcement can jeopardize the current independent new-car dealer system that has served consumers well for decades.”

Nick Genesi, a revenue department spokesman, confirmed that the agency received the petition but said it has not decided on what administrative action would be taken.

“Right now, our legal department is reviewing it to see what actions might be warranted,” Genesi said Thursday.

GADA is represented by one of the state’s most politically influential law firms in this case. Its petition was filed by Atlanta attorney Frank Strickland, a longtime legal adviser to the Georgia Republican Party on such issues as reapportionment. Strickland’s law partner is Anne Lewis, the legal counsel to the state Republican Party.

This is not the first time that the state’s auto dealers have locked horns in political battle with Tesla, a Palo Alto company run by a high-profile CEO, Elon Musk.

In this year’s General Assembly session, a bill was introduced (HB 925) that would have increased from 150 to 1,500 the number of zero-emission electric vehicles Tesla could sell directly to consumers in Georgia. HB 925 stalled in committee and did not get a floor vote in the House of Representatives.

Tesla has run into opposition in other states over the issue of selling cars directly to consumers rather than through a dealership.

New York lawmakers considered a bill last year that would have made the company’s sales illegal in that state. This year, the New Jersey Motor Vehicle Commission passed a rule requiring franchised dealers to sell electric cars rather than allowing manufacturers to sell directly to customers.

Musk protested that New Jersey Gov. Chris Christie had made a “back-room agreement” with auto dealer lobbyists, but Christie said state law required vehicles to be sold through dealers.

“My job is not to make the laws, it’s to enforce the laws,” Christie said at the time. “And Tesla was operating outside the law.”

Texas tried to persuade Tesla to locate a $5 billion battery manufacturing plant in that state, but Tesla executives chose a site in Nevada instead, citing Texas’ strict state laws that prevent direct sales to consumers and require vehicles to be sold through dealerships.

© 2014 by The Georgia Report


Tags: Doug MacGinnitie , electric vehicles , Elon Musk , Frank Strickland , Georgia Automobile Dealers Association , revenue department , Tesla