An industry group that sued to block the issuance of dealer licenses to electric car maker Tesla in Missouri lost its legal battle on appeal Tuesday.
The Missouri Court of Appeals, Western District, reversed a lower court’s decision that held the California-based electric car maker’s direct-to-consumer business model did not comply with state law because Tesla is not a franchisee.
In 2015, the Missouri Auto Dealers Association sued the Missouri Department of Revenue, alleging that the way Tesla sells vehicles violates state law. The following year, Cole County Circuit Court Judge Daniel Green ruled that Tesla is not a franchisee and its motor vehicle dealer licenses should not be renewed by theMissouri Department of Revenue.
After that ruling, Tesla briefly closed its University City and Kansas City stores but reopened them within days with court approval to operate during the appeals process.
The appellate court ruled Tuesday that MADA, a Jefferson City-based trade group that represents new-car and new-truck dealers, lacked standing to sue, reversed the trial court’s judgment and dismissed the petition. Tesla has faced opposition in other states for its direct-to-customer business model.