Revised Legislation Threatens Tesla Sales in Missouri

Tesla-Model-SNew language added to House Bill 1124 introduces restrictions that, if passed before the end of the legislative session, would make electric car manufacturer Tesla Motors’ direct-to-consumer sales model illegal in Missouri.

HB 1124, a bill originally written to change laws regarding all-terrain and utility vehicles, passed in the House April 17. However, after its introduction in the Senate, sections were added to prevent a “franchisor” (in other words, an auto manufacturer) from directly owning or operating a new-car dealership in the state. The revised bill, with the added language, passed the Senate on Wednesday. It now must return to the House for approval with the new sections.

Currently, most carmakers sell their vehicles to the public through franchised dealerships authorized (and, sometimes, part-owned) by the manufacturer. Since opening its first dealership in 2008, Tesla has taken a different approach. Its physical showrooms are for display and firsthand experience only; any purchase of a Tesla’s Model S sedan, the only car it currently offers, must be made via the company’s website. By circumventing the traditional dealership system, the company has drawn the ire of state dealer associations. Bans on direct-from-manufacturer sales of cars have already passed in the Texas, Arizona and New Jersey legislatures.

If the revised HB 1124 passes in the House it will likely mean the closure of Tesla’s service center in St. Louis as well as the scuttling of plans for another location in Kansas City. According to Tesla’s blog post on the matter, the company has already invested $2 million and hired 15 people in the state, with the intent on investing another million and hiring another 15 employees.

If passed, HB 1124 would tentatively go into effect August 28.

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