Tesla sales in Missouri hit brakes in 2017 as state refuses to renew dealer licenses

Article by Christian A., on January 3, 2017

If you live somewhere in Missouri and you’re looking forward to buy a new Tesla Model S, chances are you might not be able to purchase one within the state soon.

No, Tesla is not shutting down and is very much operational in the United States. The California-based carmaker still has the full ability to manufacture, as well as market and sell its electric vehicles. However, it couldn’t sell its vehicles in any place within Missouri, simply because the state and the court have said so.

Actually, Tesla had a license to sell new vehicles in the state. However, such license has to be renewed yearly, and the latest one was only good until 2016. An application to renew the license for 2017 had been rejected, thus leaving Tesla no legal permit to sell new vehicles in Missouri. So simply and generally, Tesla is not anymore allowed to sell its new vehicles in the state.

Now, let’s get into the details. There was actually a large obstacle in Tesla’s bid to sell in Missouri – dealerships. In particular, the Missouri Auto Dealers Association (MADA) doesn’t want Tesla to directly sell its own electric vehicles. Instead, MADA wants Tesla to sell its EVs through its members. Apparently, MADA wants the extra income from selling Tesla vehicles. However, Tesla doesn’t think dealerships are qualified enough to sell its offerings.

For the California-based company, dealers are generally not able to promote its EVs simply because of lack of desire and knowledge. In addition, Tesla doesn’t believe in generating income through services and maintenance, while such operations are the bread and butter of dealerships in general. Thus, Tesla doesn’t think dealerships fit its marketing program. Moreover, Tesla believes in a more direct relationship between the carmaker and its customers

Tesla’s apparent refusal to hand over sales to dealerships has been indicated by its efforts to establish its own sales centers in each state. In Missouri, Tesla has its special stores and the Missouri Department of Revenue first approved the carmaker’s motor vehicle dealer licenses in 2015. This caught the attention of MADA, who in turn filed a case against Missouri Department of Revenue. In August 2016, Cole County Circuit Court Judge Daniel Green ruled that Tesla is not a franchise and thus its licenses should not be renewed by the Missouri Department of Revenue. Tesla filed a request for a temporary halt of judgment, but was denied by the judge. Thus, Tesla’s hope to get a new license for 2017 while the appeal is still pending has been dashed.

Despite this debacle, Tesla is not giving up. It is taking its case before the Court of Appeals to “prevent an immediate and unnecessary loss of jobs, tax revenue, consumer convenience, and consumer choice.” It would be an uphill battle for Tesla, but a further loss may weaken its position in other states where dealerships are also opposing its direct sales approach.

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