Why Are There No Tesla Stores in CT?

(Most recent update – Sept 1, 2020)

It is much harder to buy a Tesla if you live in CT than in most of the country.

If you live in CT and want to buy a Tesla, it is more of a challenge because Tesla is not legally permitted to open stores in the state. CT shares this dubious honor with only 5 other states: Michigan, Louisiana, Utah, West Virginia, and Texas.

Dealership Franchise Laws

The reason for this state of affairs is what is known as the dealer franchise laws, all of them written many years ago.

When the legacy automobile companies wanted to expand their businesses, the method of choice was to have independent businesses retail and service their vehicles. These business people had a concern that should they succeed in building a market locally, that the manufacturer with which they had affiliated, would open stores themselves and put them out of business. In other words, these franchise laws came about to protect dealerships from their affiliated manufacturers.

The legacy auto companies have yet to get serious traction with their EVs. Tesla outsells all other EVs combined. There are several reasons for this, two of which are that many dealers don’t want to sell them, and many manufacturers have not made a serious effort to market them. The Sierra Club, in its recent EV Shopper Study, found that 74% of auto dealers nationally did not have a single EV on their lot. The EV Club of CT was asked by the Sierra Club to do dealership visits in CT. These people reported that the 74% figure understates the true nature of the problem. In many cases, even if the dealership had EVs on the lot, the salesperson would try to switch pitch them to an ICE vehicle or was simply not well-informed.

Tesla’s business model is to sell directly to consumers. They own their own stores and service centers. The franchise laws state that a seller has to be an independent business and so the dealership lobby has essentially used them as protectionism.

Service Center

Tesla has been permitted to open a single service center in CT, located in Milford. They have augmented the single location with mobile servicing units (i.e. the technician comes to you) and the fact that some issues can be solved with software updates, and those are pushed wirelessly. Added to that is that EVs need far less servicing than ICE vehicles and having only a single service center and no stores have not prevented Tesla from being the most widely registered EV marque in the state.

Leasing

When the franchise laws were written, nobody leased cars, and so those laws don’t specifically address leasing. Tesla has obtained a leasing license in CT. This is a fairly recent development (December 2019). It was hung up for a while due to the politics, but it is in force and the company is leasing vehicles from its service facility in Milford. Test drives are permitted.

Delivery

The laws prohibiting sales also prohibit delivery. This applies even if you lease a vehicle in Milford. If you live in the eastern or northern part of the state, Tesla stores in MA or RI are also NOT a delivery option (different state laws). A pickup in Mt. Kisco is necessary.

Showrooms

Some readers may remember that there used to be a Tesla showroom in Greenwich, CT. Tesla has been allowed in some places to open showrooms where prospective customers can look at the vehicles and ask questions about them. They have been permitted to do this in Texas, another state where sales are prohibited. Even where Tesla is permitted to open stores, the number has been capped (political compromise), and showrooms expand their reach somewhat. The Tesla employees at these showrooms are not allowed to discuss price, help a customer configure a vehicle online, or offer test drives.

This was always a fine line to walk and the dealers cracked it open. They sued Tesla, saying there were activities at the showroom that crossed the proverbial line. Tesla ended up closing the location down.

Beyond Tesla

Tesla has been the only manufacturer to go the direct sales route to this point. But that won’t be the case in fairly short order. Rivian, the startup electric truck maker (partly owned by Ford), has announced its intention to sell direct. Others are on the 2-3 year horizon.  And direct sale/lease is not the only new flavor coming online. There are pilots underway for subscription services, for both EVs and ICE, such as Borrow (EVs), Access (BMW), Hertz MyCar, and others. As you can see, some are owned by OEMs and others by third parties. The point is that the world is changing. EVs are part of that, but technology writ large is the major reason.

Buying a Tesla

Tesla has been fortunate in that it has very high customer satisfaction. Many test drives are of the informal variety, where an owner lets a friend take it for a spin. For people interested in buying a Tesla, they need to configure the car online or visit an out-of-state store. The nearest stores to CT are in Mt. Kisco, NY, and Warwick, RI. There are also occasional ride and drive events in the state in which Tesla participates. Nothing like that is happening at the moment due to the social distancing measures in place. The next National Drive Electric Week, which has many events around the state, is scheduled for September 26 – October 4, 2020.

Tesla also offers a return policy. If you are unhappy with your vehicle, it can be returned within 7 calendar days. The vehicle must have been driven under 1,000 miles.

The EV Club has many Tesla owners and anyone who may be interested is encouraged to reach out to us via the contact form on this website for further information.

What Else You Can Do

Even with a service center and an enthusiastic clientele, the lack of stores still adds friction to the purchase process. Tesla has advised us that sales are higher in areas where they have stores. You can help! Write, email, or call your elected state senator and representative to tell them you support direct sales for Tesla and other EV manufacturers. The only way to counter a well-funded and organized dealer lobby is with voters making their voices heard. If you do not know who your representatives are, you can locate them by going to https://www.cga.ct.gov/. Click on Representation (located at the top left side of the home page) and click on “Find Your Legislator”. Enter your town, street name, and street number and click to see a list of names. Click on the name and you will get to their individual web page.

 

 

1 thought on “Why Are There No Tesla Stores in CT?”

  1. PETER JONES
    Colchester, CT 06415 | pjones14@sbcglobal.net

    To: Governor Ned Lamont; State Senators Norm Needleman and Carlo Leone; State Representatives
    Brian Smith and Roland Lemar; DMV Deputy Commissioner Antonio Guerrera

    Re: New Tesla Vehicle Deliveries Not Available to Connecticut Residents

    Gentlemen:

    • Connecticut stymies CT residents from buying a Tesla because sales of Teslas are not allowed in CT and CT residents must purchase and pick up the vehicle out of state. If CT modified or changed the law to allow deliveries of Teslas to CT, not only would CT benefit from increased revenue from additional purchases, it would support improvement to the environment and enhance the safety of CT’s citizens by eliminating travel to and from Mt Kisco, NY for vehicle pickup.

    I plan to purchase a new Tesla in September. I do not want to lease. To my bewilderment, I have discovered that the closest and only way for me to receive my new Tesla in CT is for my wife and I to drive 107 miles (1 hr. 45 mins.) from Colchester, CT to Mt Kisco, NY. After we drive there, she will need to turn around and drive our vehicle back herself while I drive the new Tesla. I cannot find any other suitable options. We are senior citizens planning ahead and looking forward to Tesla’s safety features to prolong our independence, mobility and quality of life.

    When we pick up the vehicle at Mt Kisco, it will have temporary NY plates. Mt Kisco will collect the registration fees and CT taxes. NY tax exemption Form DTF-820 will be signed. I will drive the vehicle back to CT. Mt Kisco will finish processing the registration through the CT DMV. CT plates will be mailed to me.

    CT receives the full tax benefit for this vehicle despite my having to drive all the way to NY to pick it up – a tax of 7.75%, or approximately $4,500. As a side note, over the years CT vehicle sales tax revenue makes up 75% – 80% of the overall CT sales tax revenue. Who else does this law or restriction benefit? Not the citizen and consumer who pays taxes and helps drive the economy. If someone wants to buy a Tesla, they may risk their safety to bring the vehicle back home. For me, driving 107 miles to NY and then driving a very high-tech vehicle for the first time back to CT may lend itself to unanticipated distracted moments while familiarizing myself with the new vehicle’s technology. I would rather have the vehicle delivered to me or pick it up closer to home at the only CT Tesla Service and Gallery in Milford. As an aside, Milford can lease Teslas which results in a smaller revenue benefit for CT from tax on the lease down payment and each monthly payment.

    Tesla tells me they are not allowed to deliver to any location in CT by CT law, even if all paperwork has been signed and the vehicle and taxes have been paid for in advance. I would like to know what CT law prevents delivery to CT. Neither nearby Rhode Island nor Massachusetts can sell a Tesla to CT residents. These travel logistic issues do not need to exist and should be modified.

    I am sure this CT roadblock stops or stymies many potential buyers from purchasing one of the best, environmentally friendly and safest vehicles on the road, manufactured by one of the largest auto and solar energy companies in the world by market value. It is almost shameful that this restriction or law still exists. Tesla is not going away. CT would benefit financially if at a minimum Tesla could deliver vehicles, safely, to CT. This would eliminate the roadblock and could result in increased CT tax revenue from the vehicle sales tax from additional buyers.

    In most other states, Tesla offers four delivery options to customers. Conditions apply depending on the state and location:
    1. Express Delivery: The customer will go to one of Tesla’s delivery locations and pick the vehicle up. The required documents will be waiting inside the vehicle, ready to be signed. All the financials and paperwork will be signed on the spot if not already done so. The vehicle will have temporary plates on it. You can then drive to the exit, return the completed documents, and drive home.
    2. Tesla Direct: Tesla will deliver the vehicle to the location of your choice (home, workplace, etc.) up to 220 miles away. Once the vehicle has arrived, the Tesla representative will have you sign the paperwork, return the completed documents, and you will be ready to drive within minutes.
    3. Tesla Direct Drop: Tesla will drop the vehicle off at any location you choose (home, workplace, etc.) up to 220 miles away and leave it for you to unlock via the Tesla app. Payment, paperwork and agreements must be completed in full and e-signed prior to delivery. You are required to sign and send back any remaining physical paperwork left in the vehicle via a pre-paid shipping envelope within 24 hours.
    4. Carrier Direct: For customers who live more than 220 miles from a Tesla location, a carrier will bring your vehicle to your agreed upon delivery address. Payment, paperwork and agreements must be completed in full and e-signed prior to delivery. You are required to sign and send back any remaining physical paperwork left in the vehicle via a pre-paid shipping envelope within 24 hours.

    For a solution I suggest the following. As with other out of state online purchases, taxes and delivery are included in the sale of the item. This is the case here except for signing documents. If CT would eliminate the CT restriction on delivering vehicles to CT and allow delivery to Milford, or to a location of choice, it would benefit everyone. As indicated above, the necessary taxes and paperwork could be completed online and e-signed before delivery is made to a CT location. The Milford location could be a depot if possible. The customer could inspect the vehicle there and accept delivery or reject it if there are any issues even though the vehicle will have been fully paid for and processed. It is great that Tesla allows you to return the vehicle within 7 days if you are not satisfied. If there were any issues with the vehicle, the Milford Service Center could address those issues and you could easily drive yourself back home if you had to leave the vehicle there. If you took delivery at Mt Kisco and detected a problem with the vehicle, you would need to drive all the way back home to CT and then drive back another day.

    In 2019 House Bill No. 6820 was created for the purpose of allowing Tesla to sell its vehicles in CT. Unfortunately, I believe Tesla’s business model and an effort to reduce costs resulted in Tesla having to abandon this avenue at that time. Tesla may change their approach sometime in the future but at this snapshot in time, CT residents have no choice but to purchase a Tesla in NY. In my opinion, the benefits of making appropriate modifications to the law for the reasons I have stated stand alone on their own merits without requiring Tesla’s involvement. By distribution of this correspondence, I hope Tesla might provide their feedback or support on this issue.

    The trade group CT Automotive Retailers Association opposed any change to the related law. A CT ruling at the time prevented Tesla from selling vehicles in Greenwich, CT. The president of the group applauded the ruling and indicated that this ensures the CT vehicle consumer is protected by the CT dealerships and that lending requirements in place would protect the car buying public. Personally, I have never felt secure buying a car from a dealer. The association has an unfair lock against innovative competition, such as Tesla and other EV manufacturers who may wish to sell their vehicles directly.

    In the spirit of safety, fairness and increased revenue for the state of CT, I think it is time to instill common sense and do what is right for CT and its residents – either modifying or changing the laws to support a free marketplace that will benefit everyone. There is room for all to exist together and it is time to embrace change and innovation. At the very least, there should be a way to provide some sort of work-around modification to the law to allow Teslas purchased out of state to be delivered to CT. This is not only an unfair dominance issue, it is a safety issue, an environmental issue, and it would benefit CT financially.

    Thank you for your consideration.

    Peter W. Jones Dated: August 11, 2020
    cc: Elon Musk, CEO, Tesla, Inc.
    Tesla, Inc. Corporate Headquarters
    M. Yusuf Mohamed, Deputy General Counsel, Tesla, Inc.
    Rohan Patel, Director, Policy & Business Development, Tesla, Inc.
    Albert Gore, III, Policy & Business Development, Tesla, Inc.
    Tesla, Inc., Westchester-Mount Kisco, NY
    Tesla Gallery, Milford, CT
    Tesla, Inc., Warwick, RI
    Tesla, Inc., Natick, MA
    Richard Jordan, President, Tesla Owners Club of CT
    Bruce Becker, President, Electric Vehicle Club of CT
    Curt Johnson, President, Save the Sound
    Carol Platt Liebau, President, Yankee Institute

    Reply

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