Missouri debates barring direct car sales in challenge to Tesla

Thu May 8, 2014 5:52pm EDT

A Tesla Motors logo is shown on a Tesla Model S at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014. REUTERS/Robert Galbraith

A Tesla Motors logo is shown on a Tesla Model S at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014.

Credit: Reuters/Robert Galbraith

(Reuters) - Missouri legislators are considering banning car makers selling direct to the public, in another challenge to Tesla Motors Inc's (TSLA.O) push to bypass car dealers.

A ban would make Missouri the fourth state after Texas, Arizona and New Jersey to stop Tesla selling its electric sports cars directly to drivers.

Missouri auto dealers have proposed new language in an existing bill that would force consumers to buy new vehicles only through franchised dealers, Tesla wrote on its blog. (r.reuters.com/far29v)

"Trouble in Missouri. Auto dealers trying to sneak in a monopoly creation bill today," Tesla Chief Executive Elon Musk tweeted late on Thursday.

The bill with the new language, passed by the Senate on Wednesday, will go back to the House for a final vote," the blog said.

Musk has long argued that car dealers are a bad fit for 11-year-old Tesla because they make more money from selling traditional cars than selling the company's Model S.

Dealers say the franchise system, in which automakers rely on a network of independent dealers to sell cars, offers an extra layer of accountability for consumers. They argue that competition between dealers also lowers car prices.

(Reporting by Sweta Singh; Editing by Joyjeet Das)

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Comments (1)
RedSage wrote:
How to proceed…? Should Tesla Motors challenge existing laws on the books that restrict their sales method the harshest? Or should they sit back and wait for another of these sneak attacks, allow it to go through the legislative process, then sue immediately thereafter?

At this point, I think it may be time for a ‘Full Court Press’. Since Tesla Motors is being challenged on all fronts, they should attack on all fronts. No more playing nice. No more kindly asking to be left alone. No more allowing the bullies in the playground to threaten them with, “Just wait ’til after school!”


Tesla should hit them all, in every state, simultaneously, and immediately. Force every single state legislature and motor vehicle department to go to court to defend their sanctions, restrictions, and regulations, which are designed to enforce monopoly. Give NADA the very fight they didn’t think could happen. Call their bluff and go all in.

Because in the end, it is the Dealership Lobby that doesn’t have a leg to stand on, legally speaking.

May 09, 2014 2:04pm EDT  --  Report as abuse
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