Louisiana Gov. John Bel Edwards today signed into law a bill that electric automaker Tesla argues effectively bans its business model in the state.
Two bills aimed at strengthening Louisiana laws restricting manufacturer-to-consumer auto sales made their way through the legislative process quietly until Tesla began an online campaign against the efforts late last month.
Edwards this afternoon signed into law one of those bills—Senate Bill 107 by Sen. Mack “Bodi” White, R-Baton Rouge. The bill, much like House Bill 167, strengthens existing laws restricting auto manufacturers from selling vehicles directly to consumers.
The state auto dealers association calls the law a win for the long-held practice of manufacturers selling vehicles through dealers. Tesla, which recently became the most valuable U.S. automaker, slammed the legislation as a move by special interests to stop it from expanding into Louisiana.
“Tesla wants to invest tens of millions of dollars in Louisiana, add hundreds of jobs, and make significant contributions to local and state tax revenue. All we’re asking is the right to serve our customers here,” a Tesla spokesperson says in a prepared statement. “Whether they choose to buy from their local dealership or direct from a manufacturer like Tesla, how people choose to spend their hard-earned money on a purchase as significant as a vehicle should be entirely their choice, not something that’s dictated by government regulations.”
The Edwards’ administration did not immediately respond to a request for comment.
Automakers have long sold their vehicles through independent dealers or franchisees. But Tesla’s business model relies on direct manufacturer-to-consumer sales through its own showrooms and service locations.
Louisiana Automobile Dealers Association President Will Green says the legislation simply reinforces what the Legislature has long intended: that auto sales should be restricted to local dealers, which he argues creates more jobs for local communities.
Dealers are an important job-creator for local economies, Green adds, and Tesla’s model skirts such investment. Tesla, however, disagrees.
“Tesla has incorrectly painted it as a move … to prevent them from coming to the state. We want them to come. We want them to partner with a local dealer,” Green says.
—Sam Karlin
