U.S. law requires that only franchise owned dealerships can sell cars. This means that automakers can’t sell directly to the public. But Elon Musk isn’t known for doing something just because everyone else is, so he challenged that law in a Missouri court and lost.
Missouri court rules against Tesla
Tesla wanted to own and maintain their own showroom in the state and sell their cars, via their state dealership license, but Cole County Circuit Court Judge Daniel Green decided in favor of the Missouri Automobile Dealers Association, instead.
From the article:
“According to the terms of the judgement, Tesla can still sell its vehicles to Missourians online, and use its physical locations directly. This is the norm for most states where it’s allowed to sell its vehicles, but it’s still barred from selling its vehicles direct to consumers at all in six states.”
The forward thinking company is continuing their efforts to change state law but they face strong resistance from powerful dealership lobbies across the country (is anyone else tired of lobbyists?).
What Telsa tried to argue in Missouri was that it could issue a franchise agreement to itself, thereby satisfying the local legal requirements. However, Judge Green said that the law requires the franchisee be a wholly separate entity.
We wish them luck. I should be able to buy a car wherever I want, from whomever I want. This law does nothing more than protect the big guys from competition. What are they afraid of?
Source: Tech Crunch
