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Legislation would open Upstate to Tesla stores


Teslas are hardly a rare sight on Rochester's roads.

But there's no Tesla dealership in the Rochester region or, for that matter, any part of Upstate. The nearest ones are in major metros such as Toronto, Cleveland, Pittsburgh, and New York City. And the same holds true of the company service centers that can perform warranty or body work on the cars.

The issue is Tesla's business model: the company manufactures the cars and owns the stores that sell them. That's different from how any other automaker sells its vehicles in New York, since they go through independent, franchised dealerships.

Right now, state law limits Telsa to five stores in New York City, so the company is basically prohibited from opening locations Upstate. That, however, could change under legislation sponsored by Assembly Majority Leader Joe Morelle and Republican Senator George Amedore. They introduced the bill earlier this year, but it stalled during the legislature session. It'll automatically be reintroduced when legislators return to Albany in January.

The legislation is a little weird in its wording, since it never mentions Tesla by name and instead refers to companies that exclusively manufacture and sell zero-emission vehicles. But in effect, the legislation would allow Tesla to have up to 20 stores or service centers in New York State, and it will require Tesla or similar companies to have one facility in each of five Upstate regions: the Rochester, Buffalo, Syracuse, and Albany metros, as well as the Hudson Valley.

Local dealers are aware of the legislation, says Brad McAreavy, president of the Rochester Automobile Dealers Association, which hasn't taken a public position on it. But association representatives are in conversation with the sponsors and legislators, he says.

McAreavy argues that consumers and vehicle manufacturers are best served by the franchise dealership model. And Tesla could quickly expand into the Upstate market by working within that long-established system. It would cost the company little, since the dealer owners would pay for overhead like staff, facilities, and the equipment needed to service the cars.

Tesla has its reasons for using its direct-to-customer model. In an explanation on its webpage, it agrees it could expand quicker and cheaper if it went the franchise route. But it argues that traditional dealerships put too much emphasis on the sale of gas-powered autos, and that the model hinders the company's ability to reach potential consumers before they decide what vehicle they'll buy. The company also says it wants to expand its service centers in far greater numbers than its showrooms.

Practically and directly, the Morelle-Amedore legislation will let Tesla do that, which means local owners of the vehicles would have more convenient service and repair options.

But there's a bigger picture. Right now, Tesla's are luxury vehicles with price tags that top $100,000; the new Model 3 has a $35,000 base price, but the company has run into a lot of manufacturing issues and hasn't been able to ship nearly as many as it expected to. They're sleek and fast, and they've done a lot to bust the image of EV's as nerdy little lunchboxes on wheels.

The company sells only a fraction of the electric vehicles in New York. McAreavy offers up some numbers to show the effectiveness of traditional dealerships vs. Tesla's model. New York State has an electric vehicle rebate program, and since March it's registered 4,233 sales, McAreavy says. Only 110 of those vehicles were Teslas, he says.

But think about how carmakers use sleek sports cars as marketing tools. Something like a Corvette isn't affordable or practical for a lot of car buyers, but it grabs consumers' attention and draws it to the rest of the Chevrolet lineup.

That's what Teslas have done and will likely continue to do, not for any specific car brand, but for the whole of electric vehicles.