Tesla Motors Inc (NASDAQ:TSLA)’s test drives have been cancelled by the Iowa department of Transportation. The idea of a test drive was to create more awareness among the state’s residents about the Model S and get their feedback, but it seems that Iowa authorities did not like the idea.
Tesla can’t even promote
Tesla is the only car manufacturing company that does not follow the conventional auto dealer model of selling cars. Instead, Tesla sells directly to customers. This means that it is not a licensed dealer in Iowa, and as an automaker, is not allowed to sell cars directly to the public per state law, according to the Des Moines Register. Tesla responded, saying that the laws do not apply to test drives and that they would not be selling anything.
Iowa becomes the latest state backing auto dealers, joining the ranks of several states, including Arizona, New Jersey, Maryland, Texas and Virginia, where the EV manufacturer is facing similar restrictions, either by limiting or putting bans on any customer development efforts.
Iowa latest to join anti-Tesla list
IADA President Bruce Anderson told the Des Moines Register that one cannot just sit in a hotel parking lot and sell cars. Anderson added, “Independent dealers are aggressive in pricing against each other… If you wanted to buy directly from Chevy or Ford, the price on the sticker would be the price.”
This suggests that to own a Tesla car, Iowans will have to travel to other regions such as Chicago or Minneapolis, where Tesla is free to run its course. In New Jersey, authorities recently suggested that the company restrict its activities to specific “galleries,” but Tesla is still struggling with authorities there to decide on what it can or cannot do.
According to ecomento.com, the case in Georgia is very complicated for the Palo Alto-headquartered company, as the state boasts of being among the states where electric vehicles are very popular, although maker-operated stores are limited to 150 sales per year. Additionally, the state’s automobile dealer association wants Tesla to be stripped of its ability to sell cars, based on allegations that the company has surpassed its sales limits.