"Keep a level field for EV sales, don’t undermine dealership model"

Keep a level field for EV sales, don’t undermine dealership model

Published April 07. 2021 3:47PM 

By The Day Editorial Board  

Electric vehicles, which were a long time in reaching the point of practicality, now have consumers more interested and manufacturers more committed. The cars are getting cooler, there are more models, and electric trucks will soon be on the market. There will be a lot of money to be made. By some estimates EVs will be outselling gas and diesel vehicles in less than 20 years.

That is significant, because EVs can make a sizable difference in lowering the greenhouse gas pollution that contributes to climate change. Gov. Ned Lamont made it official in his budget address that the state will take the next step in discouraging fossil fueled-transportation when he announced Connecticut's partnership in TCI-P (Transportation and Climate Initiative Program). The state has a strategy to reach a 26% reduction in carbon emissions by 2032. Its partners include Rhode Island, Massachusetts, Washington, D.C. and at least eight other jurisdictions.

More electric vehicles for personal and public transportation, governmental and commercial uses can't come too soon. But that is not the same as saying EVs should come to Connecticut via a statutory change that gives certain manufacturers a pass on the state's motor vehicle sales and repair laws.

Senate Bill 127, which passed the General Assembly's Transportation Committee March 29, is one of those bills beloved of lawmakers and lobbyists who want to benefit a class of one. In this case, the beneficiary of the bill would be a manufacturer of electric vehicles being given the right to sell its cars without a dealer in the middle between the maker and the buyer.

For the moment, the sole beneficiary would be Tesla, the pioneering manufacturer of electric vehicles with a business model of selling directly to consumers. Supporters of the bill argue the direct-sales approach will boost EV sales and that it wouldn't be long before other makers of electric vehicles join Tesla in doing so, if the bill is approved.

But longstanding manufacturers, under existing rules, are already selling Chevrolet, Volkswagen, Ford, Nissan, Toyota and other fully electric vehicles through dealerships.

Automobile dealerships are not usually thought of as a business class that needs protecting. However, in Connecticut they enjoy a statute that regulates their industry to their advantage and, it can be reasonably argued, the benefit of consumers as well. The legacy dealership model encourages competitive pricing and advocacy when doing business with car manufacturers; local service centers are convenient and provide local jobs.

Proponents of the bill argue that the old model is just your father's Oldsmobile, and that Connecticut should let Tesla and other qualifying manufacturers sell directly. They have a point to the extent that consumer choice is good for business and for state sales tax revenue. Their argument that the current approach is blocking innovation and electric vehicles is bogus, however. 

Dealers in Connecticut are just getting momentum on selling electric vehicles made by the manufacturers with whom they hold franchises. They are installing charging stations and investing in infrastructure for when the new EVs arrive in their showrooms. Tesla or any other car manufacturer is free to compete on the established playing field.

When he unveiled the Tesla mid-size Model Y SUV in 2019, CEO Elon Musk said the company's goal from the start has been for the rest of the car industry to go electric. Indeed Tesla, which recorded its first full-year profit in 2020, deserves to be acknowledged as the pioneer and the nudge in the ribs of other companies to get moving on electric vehicles. The Model Y has broadened its market in the U.S. and overseas, and as a more affordable car than the first Teslas, has increased the company's sales and thus the number of EVs taking the place of fossil-fueled cars on the road. The company's website trumpets that "Tesla believes that the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better."

We couldn't agree more, but as a local business itself, The Day recognizes the microeconomic benefits of local ownership. Local sales to local businesses, which dealerships are, circulates money back through the community.

Yes, as everyone can see, The Day accepts paid advertising from local business owners, including automotive dealers. So yes, this company benefits if local dealers remain strong. But so too, we believe, does our regional economy.

Electric vehicles are available to Connecticut drivers, and many more will be. Unless and until consumers no longer want the dealership  model, this is still the way to go electric.

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.

https://www.theday.com/article/20210407/OP01/210409571