Tesla Motors is now authorized to sell cars directly to consumers in Maryland. The proposed direct sales bill was passed by the state’s General Assembly, allowing the company to be a legal dealer of its products in the region.
A win, but with limitations
The decision on the bill came just before the legislative session was to end. Following the approval, Tesla will be able to have four stores in the state to manage direct sales, according to the Washington Times. In this regard, Diarmuid O’Connell, the company’s vice-president of Business Development, stated that such an agreement should “serve as an example to other states still blocking free markets, consumer choice, and American innovation.” Also O’Connell expressed gratitude toward politician Kirill Reznik and the Maryland Automobile Dealers Association for supporting the bill.
However, the right to sell directly to consumers comes along with a few restrictions, in a sense, which include that Tesla and other companies practicing direct sales will have limited access to consumers within the state. For instance, Tesla’s stores can only sell electric cars or vehicles running on non-fossil fuels. In addition, the bill deems it illegal fo merchants that trade gas and diesel operated vehicles to have any kind of franchise with the California-based electric car maker. Moreover, the number of licenses that could be granted to Tesla in the region is constrained, which is in contrast to traditional sellers, which can freely apply for any amount of dealerships.
Long battle for Tesla
There exists 37 other states that have permitted direct sales for companies such as Tesla. Yet dealership groups and state legislators elsewhere have managed to successfully ban the direct selling of products.
Others who stand against the legalization of direct sales have been of the notion that such a procedure would damage their market share and hamper other legal defenses in place to protect consumers. In response, Tesla Motors and its supporters claim that those opposing the bill are attempting to safeguard their own business interests and regulate competition in the market. In spite of everything, direct sales are still in banned in other states like West Virginia, Arizona, Texas and Michigan.