UPDATE: Lawmakers back down on direct auto sales ban

Tesla Motors Inc. prevailed Thursday in Indiana, where lawmakers sidelined a bill that would have kicked the company out of the state unless it establishes dealerships.

Tesla, led by CEO Elon Musk, is licensed to sell its electric cars directly to consumers in Indiana and has operated one store in Indianapolis for two years. State Rep. Kevin Mahan introduced a bill, which General Motors Co. lobbying helped to create, that would have required Tesla and other car companies to establish franchised dealerships.

After a hearing Thursday, the Commerce and Technology Committee voted to send the bill to a “summer study” session, in essence, tabling it.

“We look forward to participating in the upcoming summer study process where we will be able to fully air the issues of vehicle sales and consumer choice in an open and public forum,” Tesla said Thursday in a written statement.

The legislative battle comes as both carmakers prepare for head-to-head competition to sell lower-priced, long-range electric cars next year. GM is readying its Chevy Bolt, while Tesla is preparing to unveil the Model 3.

In a written statement, GM said it was pleased that the issue, “which demonstrates the inequity of different competitors having different rules in the marketplace,” was debated.

“We will continue to work on this issue in Indiana and nationally, and will continue to express our concern anywhere we find market participants are operating under different rules,” GM said.

Mahan said that he welcomes Tesla to Indiana, but thinks it should have two dealerships competing on price. He also wants the Palo Alto, California-based company to get more involved in the local community.

“I look forward to Tesla supporting our local little leagues,” said Mahan at Thursday’s hearing.