A bill to ban automakers from selling cars directly to consumers in Missouri has been upheld by the state’s Republican majority leader, as Tesla fights to preserve its direct-sales model.
Last week the Missouri Senate put forward a bill that bans carmakers from selling their vehicles directly to members of the public, at the behest of the Missouri Auto Dealers’ Association (MADA).
The association presented its request on the basis that Tesla’s desire to establish a direct-sales shop in Missouri would constitute a violation of state franchise law.
The bill states that consumers would only be allowed to buy vehicles through franchised dealers, on the basis that this will promote competition, provide more accountability and support consumers in the case of warranty disputes. Tesla branded the amended bill “monopoly creation” and claim that dealers’ motivation is to ensure that carmakers continue to use the franchise model.
But on May 13th, the house majority leader and Republican senator, John Diehl, said that a meeting had been held between Tesla and MADA representatives, resulting in an end to the bill and a commitment from both parties to “find some common ground”.
Car dealers in Missouri are responsible for up to US$13.1bn in sales each year, according to MADA. This covers approximately 400 dealerships across the state, employing a total of 20,000 people. MADA’s president, Doug Smith, fears that a move to a direct-sales model by manufacturers such as Tesla could result in a loss of up to 100 dealerships over the next 5-6 years.
Tesla does not currently have any franchises in Missouri, although it owns one shop in St Louis and has plans to open another in Kansas City later this year. Tesla has fought similar battles in Ohio and New York, and in March of this year lost the right to sell directly to consumers in New Jersey.
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