According to The Wall Street Journal, Tesla Motors made a deal Friday that will allow the company to continue selling cars directly to customers at its five stores in New York state.
A pair of bills proposed by lawmakers would have banned direct auto sales and required manufacturers to use franchise auto dealers. This would have shuttered Tesla’s New York stores because the company uses a direct-sales model.
The agreement — which the Journal said was reached by New York Gov. Andrew Cuomo, Tesla, auto dealers, and “legislative leaders” — will require any new stores in the state be opened up under a “strengthened dealer franchise law.”
But Tesla’s existing stores would be grandfathered in and allowed to continue to operate. As a result of the deal, the Journal said legislators agreed to remove language from the bill that would have closed Tesla’s stores.
Cuomo told the Journal the deal was a “win-win for consumers, for the franchised auto dealers, and manufacturers who play such a vital role in New York’s economy, and for cutting-edge companies like Tesla.”
Diarmuid O’Connell, Tesla’s vice president of business development, called it a “constructive solution.”
Tesla has fought battles over its direct-sales model in several states including New Jersey, where the state’s Motor Vehicle Commission approved a measure that would ban direct auto sales there earlier this month.
The chairman of the New York state Automobile Dealers Association, Lou Roberti, told the Journal the deal made in New York could “serve as a model for other states as they consider how to accommodate Tesla and a distribution system that has served the public well.”
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