HB 369: The Tesla Carve-Out

This bill passed the House unanimously and passed the Senate with a vote of 26-1.

Despite Representative Kim Coleman making a passionate plea to her fellow Representatives that her bill to legalize direct sales of vehicle was in line with the free market as required by Utah’s Constitution, the 2015 bill failed 32-41. Legislation the following year didn’t make it out of committee.

Since then, Tesla sued the state and lost on a narrow issue before the Utah Supreme Court.

This year, Rep. Coleman is sponsoring a more narrowly tailored bill—one that is effectively applied only to a company like Tesla. Direct sales by a manufacturer—that operates a showroom in Utah—will be allowed only for vehicles that are “exclusively propelled through the use of electricity, a hydrogen fuel cell, or another non-fossil fuel source.”

In other words, companies like Kirkham Motorsports and Vanderhall, which manufacture vehicles that use gasoline, would still be prohibited from directly selling their vehicles to Utahns.

Our soft support for this bill is qualified because the provisions are written so narrowly as to exclude others who should be free to sell to consenting customers.

Even the Federal Trade Commission recommends removing the middleman and allowing direct vehicle sales, a move that is estimated to save the average consumer 8 percent on vehicle purchases. But those middlemen and their lobbyists continue to defend their antiquated, protectionist policies that harm consumer choice and convenience.