Missouri The Latest State To Add Legislation That Would Bar Direct Sales Of Tesla Cars

Tesla has its work cut out for it in Missouri, where yesterday legislators followed states like New Jersey and added a nugget into a previous bill going around that would bar the company (or any other carmakers) from selling vehicles directly to consumers in that state. Tesla, of course, isn’t happy about this.

In a blog post yesterday from the Tesla Motors team, the company calls the new proposal in the House, HB 1124, a “sneak attack to thwart due process hurt consumer freedom in Missouri.”

Tesla writes that the language in a bill that’s been in circulation since December 2013 would mean consumers in Missouri would be restricted to buying cars through franchised dealers.

It was passed by the House on April 17 without the anti-Tesla language. Last night, 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, essentially without debate.

Tesla claims that the change is “completely unrelated” to the original bill, which included laws on all-terrain vehicles and other recreational vehicles. It’s also a departure from existing law, which bars franchisors from competing against their franchisees, not protecting franchisees from manufacturers. This law would change that, notes Tesla in the post.

Tesla complies with that statute because we do not compete with any franchise. Just as we saw in New Jersey, however, this bill amendment expands the scope of the existing law well beyond its original intent. They are attempting to do so in part by redefining the word “franchisor” to mean “manufacturer”, a pirouette of which the legislators may not even be aware. To be clear: this is worse than a mere case of dealers trying to protect an existing monopoly – this is a case of dealers trying to create a monopoly.

The Federal Trade Commission recently expressed its support for the right of companies to sell directly to consumers, a position Tesla makes sure to underline in the post, quoting: “Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated.”

“This debate should be held in the full light of day with all sides being given an opportunity to make their case,” writes Tesla, including a link for consumers to reach out to their legislators. “Instead, the dealers are again trying to ram through a provision under the cover of darkness and without public debate. The people of Missouri deserve better from their elected officials.”

Trouble in Missouri [Tesla Motors]

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  1. Lenne says:

    I never did completely understand this hullabaloo. Are they preventing direct sales because they are trying to protect an industry (Auto Lots, Car Salesmen)? I could have sworn that selling cars wasn’t the most profitable thing to get into anyway. I seem to remember the steep decline of new car purchases. In any rate, I am all for cutting out the middle man, because this would (logically) mean cutting out said middle man’s (many times, substantial) markup, thus making new cars more affordable.