Tesla Motors fights proposal to ban direct car sales in Missouri

05/11/2014 7:13 PM

05/11/2014 10:31 PM

Electric car maker Tesla Motors is decrying a last-minute legislative move to prohibit direct car sales to Missouri consumers in a battle playing out in several states between the California company and traditional car dealers.

Missouri lawmakers added new wording to a pending bill last week that would bar auto manufacturers from circumventing car dealerships and selling directly to buyers, the St. Louis Post-Dispatch reported. The measure passed the Missouri Senate without debate.

In a statement on its website entitled “Trouble in Missouri,” Tesla called the move a “sneak attack” orchestrated by the Missouri Auto Dealers Association as the Legislature prepares to adjourn the end of this week.

“This debate should be held in the full light of day with all sides being given an opportunity to make their case. Instead, the dealers are again trying to ram through a provision under the cover of darkness and without public debate,” the statement reads.

The company currently has one small Missouri facility, in St. Louis, and reportedly is planning a Kansas City outlet.

The effort’s top supporters include state Senator Mike Kehoe, R-Jefferson City, a former car dealer. Kehoe in April asked the Missouri Department of Revenue to explain why Tesla was licensed in 2013 to operate a sales operation near St. Louis, despite not contracting with any dealers.

Kehoe’s letter called Tesla’s business model one “clearly designed to circumvent the traditional franchise model for the distribution and sale of new motor vehicles.”

“It is not clear that the statutes apply to a seller like Tesla,” acting Revenue Director John Mollenkamp wrote on April 30, about a week before the new language appeared on the legislation in the form of an amendment.

Neither the Missouri car-dealers lobby nor Kehoe responded to the newspaper’s interview requests.

In an earlier interview with the Springfield News-Leader, Rep. Glen Kolkmeyer, R-Odessa, defended the measure as an attempt to level the playing field.

“You can’t have two sets of rules for the same type of business or industry,” Kolkmeyer said.

Tesla has fought similar legislative battles in New Jersey, New York and Ohio.

Proponents of the traditional dealer franchise model for selling new cars say it protects the consumer by providing a local point for test drives and service. But Tesla supporters say buying directly from the company eliminates an unnecessary middleman.

A group of St. Louis Tesla owners plans to travel to Jefferson City on Monday to protest the proposed restrictions.

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