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Electric Vehicles Legislation Sparks Battle Between Republicans and Wisconsin Auto Dealers

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Screengrab from WisconsinEye
Al Gore III speaks at a Wisconsin hearing on electric vehicles legislation.

A dispute has broken out between Republicans and some business groups over state legislation that sponsors say would make it easier to sell electric vehicles (EV) in Wisconsin.

The bill would apply to vehicles that run exclusively on a rechargeable battery and would allow Wisconsin residents to purchase directly from an EV manufacturer. Currently, new car buyers here have to purchase from a dealership owned by a third party.

A co-sponsor of the bill, state Sen. Dale Kooyenga (R-Brookfield), says the California firm Fisker, which is reportedly looking at making electric cars at the huge Foxconn facility in Racine County, has said direct sales are needed for it to locate here.

At a public hearing in Madison this week, Kooyenga read from a magazine article quoting Fisker's CEO Henrik Fisker, who says he's comparing potential production sites: "'The one sticking point for me is I don't want to start producing a car in a state where I can't sell my car in that state. If they change those rules, I think they will be in the lead. But right now, they are not.'"

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Screengrab from WisconsinEye
State Sen. Dale Kooyenga (R-Brookfield) gestures while speaking during the Aug. 25 hearing at the Wisconsin State Capitol.

The electric carmaker Tesla is also strongly pushing the bill. Currently, Wisconsin residents who buy a Tesla electric vehicle have to pick it up in another state, usually at the nearest Tesla dealer in northern Illinois or Minnesota. Tesla executive Al Gore III, son of the former U.S. vice president, told the hearing that allowing direct manufacturer sales of EV in Wisconsin would be innovative.

"The history of innovation in America is not just about designing, engineering and building products, but also creating new ways to market, experience and deliver products to people," Gore said.

About two-thirds of U.S. states allow the direct sales. But big carmakers like Ford, GM and Toyota are trying to prevent the change here.

Josh Fisher is with the trade group the Alliance for Auto Innovation and said as traditional carmakers start producing more EV, they don't want to anger the existing dealership network.

"The bill creates a risk of lawsuits from dealers against manufacturers, if the manufacturer-owned store operates in the same market area as that current dealership. Wisconsin law already has a provision that allows dealers to challenge the fairness of any change to the system of allocation for vehicles," Fisher said.

Fisher also said the bill would discriminate against plug-in hybrid electric vehicles, which also have a gas tank and engine to allow longer driving between battery charges.

The Wisconsin Automobile and Truck Dealers Association also opposes the direct sales bill. Association President Bill Sepic said if it passes, don't expect anything lower than the manufacturers suggested retail price (MSRP) at a carmaker-owned EV store.

"It is documented that most company stores sell product at MSRP. Fixed pricing. No negotiating. The franchise dealer network pits multiple owners of identical products, within close proximity to one another, allowing different dealerships to vie for consumers' business. This is a true free market. It benefits the consumer, and it benefits the business owner," Sepic said.

Sepic also contended that if the direct sales bill passes, some dealerships will close.

Sponsors of the measure dispute there'd be fewer jobs in auto sales.

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Screengrab from WisconsinEye
State Sen. Duey Stroebel (R-Saukville), chair of the Government Operations, Legal Review and Consumer Protection Committee, asks a question during the Aug. 25 hearing.

The bill seemed to get a favorable reaction from Republicans who control the Senate committee that held the hearing. A few Democrats are also sponsoring the measure, and the renewable energy organization RENEW backs it.

It could pass later this year. It's unclear if big carmakers and the car dealers would then sue to try to stop direct manufacturer sales of EV from getting underway in Wisconsin.

Chuck Quirmbach joined WUWM in August 2018. He focuses his longform stories on health, innovation, science, technology, transportation, utilities and business.
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