By Erica Orden and Mike Ramsey
Electric car maker Tesla Motors Inc. struck a deal Friday with
New York Gov. Andrew Cuomo and the state's car dealers that will
allow it to keep five existing company-owned stores, as long as it
doesn't open more direct sale outlets in the state.
According to the agreement between Tesla (TSLA) , Mr. Cuomo,
legislative leaders and auto dealers, additional Tesla retail
locations would need to be established under a "strengthened dealer
franchise law." In return, elected officials agreed to drop
language in a bill in the state legislature that would have forced
Tesla to close its existing direct-sale operations.
Also Friday, Tesla said it would add titanium shielding and an
aluminum deflector plate to the underbody of its Model S luxury
electric car to prevent possible fires that could be caused by
running over objects.
The Palo Alto, Calif.-based company has already begun installing
the shielding on new vehicles and will install it on existing cars
when customers bring them in. The move comes as the National
Highway Traffic Safety Administration said it has closed an
investigation of two fires involving Tesla Model S sedans, after
Tesla said it would add additional shielding to protect the
batteries in the electric luxury cars. The agency said the
increased underbody protection should reduce the risk of fires if
the car runs over an object in the road that pierces the battery
pack.
Tesla's agreement with New York, meanwhile, is similar to one
Tesla reached earlier this week in Ohio, where the company will be
allowed to keep operating two company-owned retail stores in the
state, and open just one more. The Ohio deal requires approval from
that state's legislature, as does New York's. But New York's
agreement has the support of legislative leaders and the governor,
meaning its approval by the legislature is all but ensured.
(An expanded version of this report appears at WSJ:com:
http://online.wsj.com/news/articles/SB10001424052702304688104579467064047954346?mod=MKTW.)
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