A Blow for Tesla in Missouri

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Back to news Published 5 months ago Written By Odometer Team
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The Missouri Tesla ruling is one in series of crushing blows against free enterprise. Cole County Circuit Court's Judge Daniel Green has decided against the futuristic company in favor of the old-school plaintiff, the Missouri Automobile Dealers Association. This ruling basically allows the Association to set the rules by which Tesla must play in order to do business – in this case, Tesla will be permitted to keep their existing showrooms in the state – but the terms of their state dealership license will prohibit them from selling any vehicles directly to those who might desire to buy them there.

While trying to influence the change of state laws in favor of direct sales, Tesla faces monumental challenges from many such dominant and controlling dealership lobbies nationwide. The latest judgment states that Tesla can still legally sell cars to Missouri residents through the company’s website online, but it bars them from selling directly to consumers without a middleman. This relegates the physical locations to little more than a place to go for service and repairs, and the ruling follows a pattern that has emerged through lawsuits in several other states where Tesla has tried to do business.

Continuously trying to rewrite the way cars are sold while the entrenched industry fights back with a vengeance, Tesla doggedly continues to battle it out for the right to sell directly to the public via their own wholly-owned dealerships rather than being required to partner with outside franchise owners. In the Missouri case, Tesla even tried to satisfy the local legal requirements by suggesting the company issue a franchise agreement to itself. Judge Green, however, turned that idea upside down, ruling that the law requires a franchisee to be a completely separate entity.

PHOTOGRAPH BY TESLA

Tesla Model S

The Tesla Model S has the longest range of any electric vehicle, and gets over-the-air software updates that continuously make it better.

The ultimate goal for Tesla will be the freedom to own and operate dealerships which sell directly to consumers – online and off – without bringing a third-party franchisee into the mix. Tesla has good reasons for using the model they have chosen. One of their chief concerns regarding franchisees is that the existing dealers just have too little experience with electro-voltaic vehicles. These special cars are in a class by themselves, and as such should not be marketed alongside other non-EV options. Tesla is also keen to maintain an exceptionally high-quality standard of customer satisfaction with the purchasing experience.

As recently as May of 2016, the Wall Street Journal was reporting that Tesla has not given up on attempts to convince lawmakers that they should change their minds and support direct sales at the local level. In fact, the company has been considering the merits of mounting a federal case aimed at challenging hold-outs. The precedent cited comes from a 2013 federal appeals court ruling which involved the sale of coffins, in which a coffin manufacturer bypassed the funeral directors selling the caskets directly to customers.

The system which requires automobile manufacturers to utilize a third-party franchisee ultimately only serves to add extra expense to a vehicle, because it has to pass through another set of hands before it reaches your doorstep. This system benefits nobody except for the dealer himself, as he takes a commission on the sale when you buy a car through him. It does not provide you with a better vehicle or options, in fact, quite the opposite: The extra money required to pay his "cut" could have bought you the upgrades that you chose to forego due to your budget restrictions. Tesla is right: there is no reason to support this archaic system and every reason to eliminate the unnecessary middleman from the equation.

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