THOMAS D’ADDARIO: TESLA DIRECT SALES NOT SUCH ABARGAIN
I am responding to Dan Haar’s column, “Past time to let Tesla into state,” Conn. Post, Feb. 15, 2018)
I am writing on behalf of my dealership in Shelton, D’Addario Auto Group, a third-generation dealership. We have about 100 employees. We also donate to nonprofit organizations such as the Children’s Medical Center, and other numerous organizations, through donations and family funds.
Connecticut is not the only state to not allow the direct sales model Tesla wants. In fact, thirty of fifty states do not have Tesla stores operating legally within their borders, and almost all fifty states have strict limits on direct-sell stores to protect consumers.
The Connecticut Franchise Laws are the only protection afforded to us to protect dealers and consumers from unnecessary manufacturer regulations that when unopposed will increase the cost to our consumers.
One of the largest misconceptions which continue to arise is the loss of sales tax from people purchasing Teslas across state lines. Tesla has stated under oath that sales tax is paid at the time the car is registered. Therefore, if a Connecticut resident purchases a Tesla in Westchester County, They will pay sales tax to Connecticut when they register their vehicle with the Department of Motor Vehicles.
Tesla does not put much investment into its stores. Tesla leases property where they are located, they do not generally own the property the settings are simply show rooms without service facilities, lot storage for inventory or office space for administrative and onsite business functions. These show rooms are not paying the large local property tax bills that the franchise dealers are paying to municipalities and the state.
The 270 new car dealerships throughout Connecticut offer good, high paying jobs to over 14,000 employees. The direct sales sites, like the gallery in Greenwich, only employ eight people. The average dealership employs 54 individuals.
The direct sales model will cost jobs in both the near and short term. One local dealer estimates he would have to trim 10% of his work force to compete with a direct sales showroom with lower overhead costs and employees who are outsourced to corporate settings overseas or out of state.
Why is Tesla so determined to work outside the Franchise Laws? Connecticut Auto Dealers are willing and able to sell Teslas in Connecticut starting today. Tesla needs to get on board.
Thomas D’Addario is president of the D’Addario Auto Group, of Shelton.