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Heated debate in committee over bill to block manufacturers from selling through affiliates; dealers warn of lost investment, new manufacturers say it would stfl
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Summary
The Business Affairs & Labor Committee heard opposing testimony on SB 160, a bill that would prevent manufacturers from using affiliates to sell direct to consumers where the manufacturer already distributes through franchise dealers.
The Business Affairs & Labor Committee heard extended, sometimes impassioned testimony on SB 160, which would clarify that—where manufacturers already sell through franchise dealers—related affiliates cannot be used to circumvent franchise rules and sell directly to consumers.
Supporters, primarily franchise dealers and dealer associations, argued the bill closes a loophole that would allow established manufacturers to create or acquire affiliated brands or subsidiaries that could sell direct‑to‑consumer (DTC) in Colorado while the parent manufacturer continues to supply franchise dealers. Dealers described heavy local investments—real estate, training, equipment and staffing—made in reliance on existing franchise laws. Matthew Groves, president of the Colorado Automobile Dealers Association, told members that dealers are not opposed to EVs but are seeking the contractual stability provided by the franchise code. Multiple dealers said they have invested millions to certify technicians, install charging and stock parts to support EV service and sales.
Supporters also said current destination‑based tax rules mean Colorado would not lose sales‑tax revenue if a buyer purchased out of state and registered the vehicle in Colorado; the dealers’ argument focused on protecting local businesses and long‑term community investments.
Opponents included several new EV or joint‑venture manufacturers and clean‑transportation groups. Scout Motors representatives said the company has raised capital from Volkswagen AG to build U.S. manufacturing capacity and employ thousands; they said SB 160 would block jobs and private investment and told the committee their business model includes retail and service centers in Colorado and that they have not been parties to franchise agreements with dealers. Sony Honda Mobility representatives said their joint venture (Sony/Honda) plans a DTC model and warned the bill could push planned investment and jobs to other states. Clean‑energy groups such as the Sierra Club and SWEAP urged a no vote, saying Colorado’s existing DTC carveouts for dedicated EV startups have supported EV availability and helped the state meet climate goals.
Testimony covered consumer experience, market structure and supply issues. Several members of the public described fast, manufacturer‑direct buying and mobile service as consumer advantages; other witnesses recounted long waits, opaque markups and inventory constraints at some dealerships. The committee asked detailed questions about corporate structures, investor relationships and whether affiliates could be used to channel investment while limiting dealer access to specific models.
As of the end of the transcript provided, committee discussion remained active and no final committee vote on SB 160 is recorded in the transcript. Lawmakers will decide in later sessions whether to amend, advance or table the measure.
