Tesla Motors Inc (TSLA): Auto dealers pushing for sales ban in Missouri

Posted May 9, 2014

Tesla Motors Inc (NASDAQ:TSLA) has published a blog post about an issue in Missouri. The auto dealers lobby in Missouri is attempting to bar Tesla from selling its vehicles direct to consumers in the state by applying pressure on legislators. The bill, HB 1124, has been in circulation since December 2013. It was passed by the House on April 17th without the anti-Tesla language. The bill with the new anti-Tesla language passed the Senate after “zero public consultation” and could soon move to the House floor for a final vote without debate.

“This extraordinary maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri,” said Tesla in a blog post. “This change is not an innocent, minor amendment. It is completely unrelated to the original bill, which was about laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles. It is also a complete 180 from current law.”

The language prevents Tesla from selling direct to consumers and would force the company to utilize dealerships. The current statute in Missouri only states that a franchisor cannot compete with a franchisee. “The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).” It seems like the dealers are trying to create a monopoly rather than trying to protect an existing monopoly. Tesla Motors runs a repair facility in St. Louis with 15 employees and has invested $2 million there so far. The company is also considering opening another service center in Kansas City, which would provide another 15 jobs.

[Source: Tesla / SlashGear]