Tesla facing another US state challenge on sales practice image

The California based electric carmaker, led by billionaire entrepreneur Elon Musk, which is currently in full swing on an expansion plan, sees its direct sales practices lately even more challenged.

While effectively almost all automakers in the US rely on franchised dealerships for sales of their cars, Tesla uses a direct sales practice, owning its showrooms and allowing customers to configure their Model S sedan via the Internet.

Lately, the states of Texas, Arizona and New Jersey imposed bans on Tesla’s practice, forbidding their move to sell cars directly to customers, skipping the dealer in the process.

Now, Missouri state legislators are considering whether to become the fourth state to impose a ban on carmakers that intend to sell cars directly to the public – in a direct challenge that would affect Tesla Motors.

“Trouble in Missouri. Auto dealers trying to sneak in a monopoly creation bill today,” Tesla Chief Executive Elon Musk tweeted late on Thursday.

Tesla wrote on its blog that Missouri auto dealers have introduced a proposal for new language in an already existing bill that would effectively force any consumer to only buy cars through a franchised dealer. The modification was still not final, with the blog saying that while it passed the state’s Senate, the bill is set to go back to the House for the final vote.

Via Reuters