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Legislators are urging auto- makers and dealers to work together to resolve an impasse that has left a planned Tesla dealership in South Salt Lake unable to open its doors, with hopes of resolving the dispute in a special session this summer.
"There's got to be a way to make this work that is rational and reasonable," said Senate Majority Whip Stuart Adams, R-Layton.
The issue stems from a state law that bars auto manufacturers from selling cars directly to customers. Instead, they must go through a local dealer.
But Tesla's business model relies on direct sales, and the company's vice president of regulatory affairs, James Chen, said that, based on verbal assurances from state regulators, they invested $3 million on a showroom in South Salt Lake.
A week before the grand opening, however, the attorney general's office notified Tesla its model violated state law and that the company could not open its doors. The company is paying rent on the building and has charging stations and does vehicle service there, but cannot sell cars and is losing money every day, Chen said.
Sen. Curt Bramble, R-Provo, was incredulous that Tesla would plow ahead with such a commitment without getting the state's approval in writing. Chen acknowledged that was a mistake, but officials "who we believed we could place a certain amount of trust in led us to believe we could make that investment."
The company has run into similar problems in Maryland, Georgia and New Jersey, but Chen said that in those states Tesla officials have been able to reach compromises with the auto dealers.
A bill sponsored by Rep. Kim Coleman, R-West Jordan, last session that would have allowed Tesla and others to engage in direct sales failed to make it through the House.
Craig Bickmore, executive director of the New Car Dealers of Utah, said the parties have been meeting in recent weeks, and he's confident they will come to an agreement in the near future, although he would not say what that resolution might look like.
Frank Pignanelli, a lobbyist representing the automobile manufacturers, said his clients would like to be able to sell their electric vehicles directly to consumers, as well, but currently have to contract with dealer franchises.
"We're asking you, as you go down this path to allow Tesla [to make direct sales], that you also allow other manufacturers to compete the same way," he said.
Assistant House Majority Whip Brad Wilson, R-Kaysville, said he has been participating in those meetings and encouraged the sides to keep talking. He said Gov. Gary Herbert has suggested that it is an issue that the governor could put on the agenda for a special session, expected later in the summer.
"We're not going to stem the tide of new technology coming," said Rep. Jake Anderegg, R-Lehi. "The system we currently have with car dealerships is somewhat becoming antiquated, and with new technology and new ways to go to market, you have to have a way of being forward-thinking."
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