INDIANAPOLIS (AP) — Automakers who sell their products directly to customers, such as Tesla Motors Inc., can continue in Indiana after a Senate panel backed down from banning the practice Thursday.
The Commerce and Technology Committee voted unanimously to strip an amendment to bar direct sales and study the issue more.
Committee chairman James Buck said he received phone calls of "incivility" from opponents of the proposed ban on direct sales.
The ban is contrary to traditional free market philosophies of the Republican lawmakers who dominate the Legislature. But bill author Rep. Kevin Mahan said his intention was to provide a level playing field for automakers trying to sell their products.
"The American free market is based on the premise that all companies large and small compete under the same rules and conditions," Mahan said.
Current law permits automakers to sell directly to customers if they do not have an existing franchise dealership. This closes the door to major manufacturers such as General Motors Co., Ford Motor Co. and other traditional manufacturers that rely on franchised dealerships to sell cars.
The measure would have stopped Tesla Motors Inc. from selling in Indiana just as the company is set to release several new, more affordable models. Tesla sells directly to customers in its own showrooms. The electric automaker currently has one showroom in Indiana, according to the company's website.
GM and dealership owners support the ban, arguing Tesla's direct sales are unfair to traditional companies that have to sell through dealerships.
"Whether a company creates an electric car, a gas-powered car or one run by solar energy, the same basic rules should be applied across the board," Jason Wetzel, GM's regional manager for public policy, said at Thursday's hearing.
But if the issue is about competition, a potential solution could be to also allow traditional manufacturers to sell directly to consumers. Neither Mahan nor Wetzel returned phone calls to comment on the alternative.
Some states __ including the major auto manufacturing state of Michigan, and Texas __ have also banned direct sales, while other states have taken measures to add sales limits.
Tesla has argued against the bill in previous hearings saying GM is attempting to kick the company out of state due to competition.
