Tesla, GM fight heats up over `GM-backed’ Indiana sales bill

Tesla Motors Inc, which has long fought auto dealers over its practice of selling cars directly to consumers, has accused General Motors Co of being the prime mover behind a bill that sought to throw Tesla out of Indiana.

Tesla has a licence for making direct sales to consumers in Indiana, and had operated a store in Indianapolis for two years. Indiana state representative Kevin Mahan had introduced a bill providing for the expiry of a dealer licence issued to a manufacturer after 30 months and which also carried the possibility of it not being renewed. Tesla would need to find franchised dealers to sell in the state after 30 months.

The legislative battle comes as both companies prepare for a direct competition to sell lower-priced electric cars aimed at the mass market next year. The proposal which had been dubbed the ''Kill Tesla'' was specific to manufacturers of all-electric vehicles.

''I want Tesla here,'' Mahan said at a 27 January hearing of the Indiana House Roads and Transport Committee. ''But they need to have a dealership. This bill gives them 2-1/2 years to put a dealership system in place.''

GM has been publicly accused of being behind the legislation and writing of the bill for Mahan.

According to Tesla, GM, which testified in a public hearing on 27 January to support the amendment, was behind the push. GM had been intensifying its efforts to block Tesla from operating company-owned stores instead of relying on independent dealers. GM had also supported a Michigan law passed in 2014 that barred Tesla from operating in the state.

"GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products,'' the report quoted GM spokesman Chris Meagher as stating in an email.

''This is nothing more than a protectionist effort by General Motors,'' Diarmuid O'Connell, Tesla's vice president of business development, said at the 27 January hearing. ''General Motors made a decision in the early part of the last century about their business model. I see no reason why, under general free-market principles, Tesla shouldn't have that same right.''