DENVER, Colo. (AP) — A Colorado bill allowing electric vehicle manufacturers to sell directly to consumers passed a key legislative committee, clearing the way for a compromise with auto dealerships.
The House Energy and Environment Committee approved an amended version of the bill Monday, The Colorado Sun reported.
The original measure would have allowed Ford Motor Co., Toyota Motor Corp. and other automakers with dealer franchises to jump into the direct-sales market to sell their electric vehicles.
The compromise was an amendment that will allow only automakers that have no existing dealer franchise to sell electric vehicles direct to consumers.
Democratic House Speaker KC Becker, a primary sponsor of the measure, said the bill’s intention is to close a loophole allowing only Tesla Inc. to sell its electric cars directly to Colorado residents.
A representative from Tesla spoke in support of the bill.
Other automakers must use dealer franchises as part of a consumer-protection law passed during the last decade. The dealers initially opposed the change laid out in the bill because it would force automakers and the dealers they supply to compete against each other for sales.
Tim Jackson, CEO of the Colorado Auto Dealers Association, said dealerships compete for consumers with price and service and invest in the local community.
They often own multiple brand dealerships so they remain in the community if the automaker goes bankrupt. An individual automaker may not offer the same benefit, he said.
The dealers association will take a neutral stance on the amended bill because the original legislation was much worse for dealers, Jackson said.
A Colorado Department of Revenue official testified the loophole would still allow any automaker to obtain a license to sell vehicles in the state.