Tesla Motors Inc (NASDAQ:TSLA) has finally scored a win in one state after setbacks in several others. The automaker has managed to lobby to get certain language stripped from a bill that was pending in the state legislature in Washington. However, auto dealerships in the state also got a compromise, so both sides are happy—for once.
Tesla restrictions stripped from bill
Last month, Tesla Motors Inc (NASDAQ:TSLA) and a number of electric vehicle enthusiasts converged on the state capitol in Washington. They were rallying about a bill which would have prevented Tesla from opening new sales offices there. According to Reuters, by the time state lawmakers were finished with it, all of the restrictions had been stripped from that bill. Tesla will now be able to continue selling its vehicles through its own showrooms instead of through dealers.
What’s unusual about the bill in Washington state is that it has something for both sides. Auto dealerships were happy because the bill granted Tesla Motors Inc (NASDAQ:TSLA) an exception. Dealers said they don’t have any issue with Tesla specifically. They just want to make sure that other automakers which already use dealers can’t come in and set up their own showrooms to compete directly with dealers.
Tesla continues to fight
The compromise shows that Tesla Motors Inc (NASDAQ:TSLA) can continue to coexist with auto dealerships. The latest state to ban Tesla’s direct to consumer sales model through a state law is New Jersey. Tesla accused Gov. Chris Christie of a “backroom deal” which resulted in a sales ban on its showrooms.
The New Jersey Coalition of Automobile Retails responded to Tesla’s claim about the alleged backroom deal, saying that the automaker is operating illegally in the state. A spokesperson said the regulation which the New Jersey Motor Vehicle bureau approved isn’t a new law. He also said that Tesla would be out of business in New Jersey by April 1 unless it decides to open up a franchise in the state.
New York could become the next state to ban Tesla Motors Inc (NASDAQ:TSLA)’s sales model. Lawmakers there are working on a bill which would also prohibit the automaker from selling its vehicles directly to consumers. At this point, sales model is completely banned in five states and restricted in two others. There are other states like New York which are working on legislation that could restrict or ban the automaker’s sales model.