Tesla Fighting With Iowa Dealers Over Test Drives

Tesla has had an up-and-down history with its direct-to-consumer sales model, with states like Arizona, New Jersey, Maryland, Texas and Virginia coming down hard against the California-based start-up. Now, according to a story in the Des Moines Register, Iowa is another where dealer lobby groups have restricted how Tesla operates in the state.

The issue cropped up when Tesla organized a three-day test drive event in a hotel parking lot in West Des Moines, but after getting a visit from a representative of the state DOT, was forced to cancel the third day of drives. The DOT told the Register that it had been tipped off by the Iowa Automobile Dealers Association, and thus the test drives were illegal because Tesla isn’t licensed as a dealer and Iowa law forbids carmakers selling directly to the public.

SEE ALSO: Why Auto Dealer Associations Oppose Tesla

Paul Steier, director of the DOT’s Bureau of Investigation and Identity Protection, said that by offering test drives, Tesla was acting as a dealer. However, he did say it wasn’t illegal for Iowans to buy a Model S online, but it if a customer wants to try it out first, it couldn’t be in Iowa.

“There really is nothing in the law that would allow [Tesla] to keep” offering the test drive, Steier said. “We’re not at all opposed to their marketing. They just have to work within the laws of the state.”

Unfortunately, it doesn’t appear that Tesla is going to get much help in the state legislature, as representatives from both sides of the aisle seem to be sympathetic to the rules in place.

“I have mixed feelings about it because I really like the car and I really like what the car stands for,” said State Sen. Matt McCoy (D-Des Moines), chairman of the Senate Commerce Comittee. “But in Iowa we tend to respect our system and the way it was set up, and I don’t see any appetite to change that.”

Des Moines Register