Electric car manufacturer Tesla Motors would be allowed to sell cars in Arizona without establishing a dealer network under a bill approved by a state Senate committee Wednesday.
House Bill 2123 is strongly opposed by traditional auto manufacturers and dealers, who argue that Tesla wants to operate outside the normal rules that require manufacturers to sell cars through dealers. They say allowing sales directly from an automaker could leave consumers in the lurch if the company goes belly-up.
"Tesla is asking for a special exemption for them to have a separate set of rules for their electric cars," Mike Gardner, a lobbyist for the Alliance of Automobile Manufacturers, told the Senate Commerce, Energy and Military Committee. "What we're opposed to is allowing one of our competitors to go around the dealer network and sell directly to consumers. We think we should all be treated the same."
(Read more: New York may be next state to put brakes on Tesla)
But Rep. Warren Petersen, the bill's sponsor, said dealers and manufacturers are trying to stifle innovation.