Tesla catches break as Missouri puts direct-sale ban on hold

TESLA V. DEALERS
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The fate of Tesla Motors Inc.’s retail strategy in Missouri is on hold after state legislators scrapped a vote on a bill that would have prevented the company from selling directly to consumers.

Timothy Jones, speaker of the Missouri House of Representatives, told The Wall Street Journal on Wednesday that the legislation would be reintroduced next year with full hearings in the state Senate and House.

The bill, Missouri HB 1124, primarily deals with all-terrain vehicles. But a provision that would ban direct sales from vehicle manufacturers -- deemed “anti-Tesla” by the company -- was added before it reached the Missouri Senate floor.

The state Senate passed the legislation on May 7 without public consultation.

“This change is not an innocent, minor amendment,” the company said in a May 8 statement. “ … It is also a complete 180 from current law.”

Tesla operates one Missouri store, in St. Louis, according to its Web site.

Owners of the company’s electric vehicles protested the proposed legislation on Monday by driving and parking their cars around the state capitol in Jefferson City.

Tesla representatives met with John Diehl, the Missouri House majority leader and Doug Smith, president of the Missouri Automobile Dealers Association, on Tuesday to discuss the bill.

“Auto dealers across the state have operated within Missouri’s vehicle franchise law for nearly thirty years,” Smith said in a statement on Tuesday. “Today, along with leadership from Tesla Motors and House Majority Leader John Diehl, we continued discussions on a legislative solution to ensure this law continues to be applied fairly in Missouri.”

The decision comes after a string of legal battles among Tesla, dealers and state lawmakers in Texas, New Jersey, Washington and other states.

According to the National Automobile Dealers Association, 48 states have some type of restriction on factory-owned dealerships.

Tesla has 52 store locations in 18 states and the District of Columbia. It plans to add a store in both Texas and Pennsylvania, and move into Connecticut and Tennessee, according to the company’s Web site.

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