MADA Sues Missouri To Block Tesla Motors Inc Direct Sales

Tesla stockBlomst / Pixabay

After failing last year to block Tesla direct sales, MADA is now suing the State of Missouri for favoring the electric car maker

Tesla Motors was given the green light by Missouri authorities last year to continue with its direct sales strategy in the state, but seems like the Missouri Auto Dealers Association (MADA) is in no mood to spare the authorities or the electronic vehicle maker. MADA has filed a lawsuit against the State of Missouri to put the brakes on Tesla’s sales in the state, arguing that the automaker’s direct sales model creates a “non-level playing field,” according to the St. Louis Post –Dispatch.

No different outcome likely

Missouri’s acting Dept. of Revenue Chief at that time did not find any issues with Tesla’s sales model, pointing out that the company does not have any established franchise dealerships and suggesting that it is operating within the law. That was the reason why MADA was trying to get the law changed.

When MADA could not achieve much with its efforts to change the law, it went the litigation route, but the results are expected to be more or less the same. Massachusetts and Missouri have the opposite political scenario, but the outcome of the litigation in Missouri is likely be the same as that of the Commonwealth.

Car dealers all over the country are not happy with Tesla’s direct sales model and have won support in some conservative States. Dealers built a national campaign talking about the benefits taken by buyers in the process of sales manipulations done by dealers.

A win for Tesla

Only recently, Tesla Motors was approved to build a showroom in San Antonio. The electric vehicle maker has asked for the rezoning of five acres of land for commercial use in the 2100 block of East Sonterra Blvd. As per current state law, Tesla cannot sell its electric cars in Texas due to the lack of an agreement with a dealership. After a showroom is established in San Antonio, area natives will get an opportunity to look at the Tesla Model S but will not be allowed to take a test drive or buy one. Tesla has already set up such showrooms in Austin and Houston.

When Tesla Motors was seeking permission to build the gallery, Bexar County Judge Nelson Wolff said, “I think it’s positive to have their showroom in San Antonio,” adding that it “shows that San Antonio is up with technology, blends with other efforts that we’re doing with solar power.”

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com

3 Comments on "MADA Sues Missouri To Block Tesla Motors Inc Direct Sales"

  1. MADA are acting like communists trying to get the government to stifle fair competition so they can maintain their jobs ripping people off with overpriced lemons. Goodbye MADA. Hello Tesla.

  2. It feels very strange agreeing with a dealership association; but, in this case, I do. Tesla shouldn’t be the only vehicle manufacturer exempted from the antiquated, protectionist, anti-consumer vehicle franchise laws. NO VEHICLE MANUFACTURERS should be subject to government regulations that have no reasonable basis. These laws should be repealed!

    MADA’s lawsuit will bring public attention to these unpopular laws making their repeal more likely. For the handful of vehicles that Tesla sells in the state, I’m surprised (but glad) that they are bringing attention to the issue. This crony-capitalist type of poor economic policy should have been reversed decades ago.

  3. Wait…MADA is complaining about a “non-level playing field” yet it was them who tried to change the law to their advantage, and when that failed they’re seeking to sue the state. Pot…meet kettle.

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