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Missouri Pulls a New Jersey on Tesla

Will the Show-Me State show Tesla the door?

Shutterstock / Callahan

Missouri has become the latest state to advance legislation that would ban Tesla’s direct-to-consumer sales model, a move the Palo Alto, Calif., electric car maker attributes to pressure from the auto dealers lobby.

The company said in a blog post that on Wednesday night “anti-Tesla” language was added to a bill, HB 1124, that then passed in the Missouri state Senate. The proposal, which made it through the House last month without that language, could soon come back to the House floor “for a final vote, essentially without debate.”

“This change is not an innocent, minor amendment,” the company said in a blog post. “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.”

It added: “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.”

Versions of this same battle have played out in a growing list of states, as we explained in an earlier story:

Franchise laws around the nation frequently prohibit manufacturers from selling vehicles directly to consumers. Auto dealers and their trade groups have fought vigorously to protect or strengthen those regulations as Tesla builds its own stores throughout the United States, with mixed results from state to state. …

Tesla has won recent legislative battles in states like Washington, Ohio, New York and Minnesota, but states such as Texas, Arizona and Virginia have retained or added laws limiting the company’s ability to operate stores.

The most recent addition to that latter list was New Jersey, where in March the state Motor Vehicle Commission passed Proposal PRN 2013-138. It required new motor vehicles to be sold through middlemen in showrooms of at least 1,000 square feet, with additional space and equipment for servicing the automobiles. The law appeared tailor made to ban Tesla’s retail operations, which would be in violation of each of those clauses.

Soon after, Tesla Chief Executive Elon Musk said in a blog post that the company was considering “judicial remedies.” Tesla operates a service center in St. Louis, Mo., and is planning to open a larger one in Kansas City later this year. Tesla isn’t yet calling for legal action in Missouri, but it is encouraging residents to contact their legislators.

“This debate should be held in the full light of day with all sides being given an opportunity to make their case,” Tesla said. “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.”

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