A bill that would prevent Hoosiers from buying cars directly from auto manufacturers passed the Indiana Senate on Thursday with no changes.
With the exception of Tesla, House Bill 1592 specifically bars direct customer sales by auto manufacturers that sell more than 1,000 vehicles a year.
Previously, the bill would have prevented Tesla Motors, an electric vehicle manufacturer, from selling their cars in Indiana. The manufacturer is known for its business model of selling vehicles directly to consumers while other manufacturers, from General Motors and Ford to Subaru and Toyota, sell through dealerships.
Several dealership owners supported the legislation, arguing that it would protect consumers from foreign markets, such as China, that are not required to meet the same standards as U.S. auto dealerships. Dealerships keep drivers safe by keeping track of warranty records and servicing recalls, whereas Chinese manufacturers may not keep track of those records and look at quantity over quality.
But earlier this year, Tesla owners testified against the legislation. They said the bill would cause Tesla to move their business out of Indiana, leaving Tesla owners with no place to service their cars. This led Rep. Ed Soliday, R-Valparaiso, to offered an amendment that would grandfather Tesla into the bill.
Grandfathered into the direct sales ban is any manufacturer of autos that registered with the state prior to July 2015 and opens at least one physical location that is a warranty repair service center before Jan. 1, 2018. Tesla fits that description.
The bill faced the full Senate on Thursday with no changes made to it.
“I believe in not messing with success,” said Sen. Brandt Hershman, R-Buck Creek. “This represents an agreement from the parties on the so-called Tesla bill issue and for that reason, I didn’t mess with a single word of it.”
The bill passed 43-5 and will head back to the House for final approval.