A bill that would allow electric vehicle makers to sell directly to potential customers, instead of going through a dealership, is under consideration in the Colorado Senate.
Under current law, Tesla can sell directly to customers, but other new companies like Rivian can’t. The Michigan company brought models of its new electric SUV to Aspen last year, which garnered considerable interest from Coloradans.
Senate Bill 167, which was approved by the Senate Energy and Transportation committee on Feb. 18, aims to equalize the electric vehicle market and bring SUV models to Colorado. It was introduced by Colorado Sen. Chris Hansen, D-Denver, and is backed by Gov. Jared Polis.
“The best, most modern, and most innovative electric vehicles should be available for sale in Colorado,” Polis said in a statement. “This bill is essential to increase consumer choice and market competition, and also would make the first electric pickup trucks with a range of 400 miles available in Colorado as soon as the end of the year.”
The current law that prohibits automakers from selling directly to consumers was passed in 2010 to protect dealerships from losing their franchises after General Motors filed for bankruptcy in 2009.
The law grandfathered in automakers that were handling their own sales in 2009. Since Tesla was active in Colorado by that point, it was exempted from the law.
But Jim Chen, vice president of public policy at Rivian, said Coloradans have substantial preorder interest in the Rivian SUV and pickup models for a “whole slew of reasons” such as performance, financial savings on gas and energy efficiency. For example, Rivian electric vehicles can pick up from zero to 60 mph in three seconds.
“A lot of Coloradans want an off-road electric vehicle,” Chen told The Durango Herald. If Senate Bill 167 passes, companies like Rivian can own and operate locations in Colorado.
With manufacturer locations in the state, customers will have access to better service, Chen said.
“We can monitor in real time the operation of that vehicle, and notify and service the customer before they even know there is a problem,” Chen said.
As far as opening a location in all corners of Colorado, Chen said, “We have to see how the market unfolds.” But if there is substantial preorder interest from Southwest Colorado, then “that means we put up physical locations,” Chen said.
“We want our customers to have a seamless experience, from purchase to use,” Chen said.
He added: “We are not asking Colorado for funding or a handout, we are asking permission to service the state, to be part of the state.”
But Tim Jackson, CEO and president of the Colorado Automobile Dealers Association, is not sure that the new bill would benefit places like Southwest Colorado. If electric vehicle makers follow the direct sales model, they will “only have one, maybe two locations in Denver and Colorado Springs,” Jackson said, whereas dealers have more of a presence in the Southwest corner of the state. That doesn’t just mean places where people can purchase cars, but service centers, too.
Gasoline cars made up 93% of car sales last year, according to an analysis by IHS Markit, a data and information service. But new registrations for electric vehicles in the U.S. are growing.
Tesla has taken some sales from dealers, but it has not made a measurable enough dent for dealers to be concerned, Jackson said.
Companies like General Motors will soon have a whole line of electric vehicles. But the new bill would give those companies an avenue to direct sales, and they would “make everyone come to them in Denver,” Jackson told the Herald.
“Cars can be really good cars and still break down,” and a dealership provides a more convenient place for support and assistance in Southwest Colorado, as most electric vehicle makers will likely open their locations in the Denver area, Jackson said.
With a dealership, customers can negotiate the price of the vehicle because of brand competition, but this kind of negotiation can’t happen if they buy directly from the automaker, Jackson said.
Debate in the Colorado Senate about Bill 167 came the same week that the Colorado Oil and Gas Conservation Commission held a stakeholder outreach meeting open to the public. Southwest Coloradans were given the opportunity to weigh in on state changes to the oil and gas industry on Friday, as the state works to decarbonize by 90% below 2005 levels by 2050.
Colorado also implemented a mandate last year that by 2023, 4.9% of an automaker’s sales in the state of Colorado must be electric.
“The entire industry is moving toward electric vehicles,” Jackson said.
Emily Hayes is a graduate student at American University in Washington, D.C., and an intern for The Durango Herald.