Tesla may seek U.S. court action on direct sales, report says

Tesla Motors Inc. is preparing to take the case for its direct-sales model to federal court should it prove necessary, according to a report.

The California electric car manufacturer hopes a combination of state legislation and approved dealer applications will allow the automaker to open up shop in the six states where it is barred. However, the automaker is preparing to argue its case in court should those options fail, according to The Wall Street Journal.

The automaker is reading up on a 2013 federal ruling that found monk-made coffins could be sold directly to customers without a funeral director’s license, The Journal reported. The case was brought on by a casket shortage in New Orleans in the wake of Hurricane Katrina.

Tesla, which is aiming to capture a broader market with its upcoming Model 3 electric car, is banned from selling directly to consumers in Arizona, Connecticut, Michigan, Texas, Utah and West Virginia. Those states combine to account for about 18 percent of the U.S. new-vehicle market.

“It is widely accepted that laws that have a protectionist motivation or effect are not proper,” Tesla Chief Counsel Todd Maron told The Journal. “Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table.”

For years, Tesla has been fighting to open those six markets and to keep open the ones it is licensed in. For instance, Tesla last year applied for a dealership license in Michigan and fought off legislation that would have essentially kicked it out of Indiana.

The automaker also was successful last year in getting Georgia, Maryland and New Jersey to allow direct sales, though it was denied in Texas.

Opening up shop in the markets where it is banned is likely important to Tesla’s goal of boosting annual sales to 500,000 vehicles by 2020. Tesla is targeting a more mainstream audience with its $35,000 Model 3 compared with its $100,000 luxury cars.