Tesla to Expand in Pennsylvania
Tesla Motors Inc., which has battled U.S. auto dealer groups over its direct sales of electric cars through company-owned stores, has received approval from lawmakers in Pennsylvania to expand retail operations there, reported Newsday.
The Pennsylvania House Wednesday passed legislation, approved by the Senate last week, that lets the Palo Alto, California-based carmaker increase the number of stores in Pennsylvania and add more service centers, the company said in an emailed statement.
The legislation, which allows as many as five stores in the state, passed 197-2 in the House and still must be signed by Gov. Tom Corbett, a Republican, to become law.
“We hope the process in Pennsylvania serves as an example for how productive cooperation can lead to a win for all parties involved, dealers and legislators included,” Diarmuid O’Connell, Tesla’s vice president for business development, said in the statement.
Unlike previous fights, the Pennsylvania deal arose from cooperation with an industry group, the Pennsylvania Automotive Association, he said.
“It seems state legislatures are feeling pressure to change state laws,” said Ben Kallo, an equity analyst with Robert W. Baird & Co. in San Francisco who rates Tesla at outperform. “Pressure is coming from their constituents of all political parties rather than special interest groups.”
The legislation is the latest win for the automaker led by Elon Musk, who has avoided selling his $71,000 Model S sedans through traditional car dealerships. Last month, the New Jersey Assembly approved a bill that creates a loophole for direct sales of zero-emission autos, and New York Gov. Andrew Cuomo signed a similar measure into law. The company this year also won an exemption to an Ohio statute banning direct auto sales and avoided a similar ban in Missouri.
The company’s ability to avoid being shut out of U.S. states with strict franchise dealer rules shows Musk is “disrupting” the conventional auto sales model, said Karl Brauer, a senior analyst with Kelley Blue Book.
“Tesla is seen as a kind of new, hip, up-and-coming company in the auto business,” Brauer said in a phone interview. “Some of the initial reactions against them by dealers in other states may have backfired a bit on the dealers — making them seem a little too tied to the past.”
Tesla now operates a Pennsylvania store in King of Prussia and service centers in Devon and Norristown, and plans to open a store in Devon soon, according to its website.
While Tesla would prefer no cap on the number of stores it can open in Pennsylvania, “I regard this as the glass is half full,” O’Connell said in a phone interview.
More Industry

Nebraska Rooftop Changes Hands
The Gregg Young Automotive Group has sold its second dealership to Janssen Auto Group, both in Plattsmouth, Neb.
Read More →
Penske Auto Group Deal a Record
The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.
Read More →
War Toll a Damper on Used Auto Prices
Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.
Read More →
Bridge the Maintenance Gap
With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.
Read More →
California Store Has New Owner
The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.
Read More →
BMW Plant Pursues Cleaner Energy
BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.
Read More →
Auto Affordability Inches Up
The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.
Read More →
Ohio Auto Group Under New Ownership
After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.
Read More →
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →