Tesla Loses Missouri Dealership Case

Tesla Motors has been selling its battery electric vehicles directly to buyers in Missouri since 2013, but a court ruling last week nullifies the California automaker’s state dealership license.

The Missouri Auto Dealers Association (MADA) filed a lawsuit in 2015 arguing that it was unfair that Tesla was issued a license by the Department of Revenue to open its own dealership.

MADA’s complaint focused on state law, which prohibits auto manufacturers from operating their own dealerships to sell its cars directly to consumers, bypassing the franchise dealer network.

Cole County Circuit Court Judge Daniel Green agreed, and stated that, “[Under state law] a single entity may not manufacture vehicles for sale in Missouri and possess a Missouri new motor vehicle dealer license.”

The ruling implies that Tesla is not a franchisee and the state’s Department of Revenue should not renew Tesla’s license.

SEE ALSO: Why Auto Dealer Associations Oppose Tesla

The judge’s decision affects two Tesla store locations in Kansas City, one in St. Louis and a new store set to open in the St. Louis suburb of Chesterfied.

Consumers can still visit the stores, chose the model car they want, but will have to make the purchase online.

Tesla spokesman Will Nicholas said the company disagrees with the ruling and will appeal it. In a statement, he said, ”Tesla will take all appropriate steps in the courts to ensure that Missouri consumers continue to have the right to choose how they purchase their vehicles.”

Dealership laws similar to Missouri’s in several states have placed roadblocks for Tesla. Legislators in some of those states are attempting to change laws to let the company operate its own dealerships.

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