The Missouri Automobile Dealers Association has renewed its years-long fight against Tesla, backing new legislation that would allow franchised auto dealers to challenge those selling vehicles without a state-issued license.
It’s just the latest step in a long-brewing dispute between auto dealers and the Palo Alto, Calif.-based electric car maker, which dates to 2013, when Tesla opened its service center in University City. Worldwide, Tesla has 330 locations.
By 2015, the auto dealers group sued the Missouri Department of Revenue, alleging the way Tesla sells vehicles violated state law. Unlike Ford or General Motors, Tesla does not sell cars through franchises. It sells its cars directly to consumers either online or in physical stores.
That legal case dragged into late 2017 and briefly forced Tesla to shut down its Missouri operations, including its store and service center in University city, before an appellate court ruled the auto dealers group had no standing to sue and dismissed the petition.
This new legislation, Senate Bill 872, was filed by Franklin County Republican Sen. Dave Schatz and would give the auto dealers group the standing to file such a lawsuit challenging Tesla’s direct-to-consumer business model.
“That’s really all we’ve asked since 2013 is a legal interpretation as to the merits of the (Department of Revenue) to allow manufacturers to sell direct to consumers,” said Doug Smith, Missouri Automobile Dealers Association president and CEO. “We believe the appellate court unintentionally created a scenario where the DOR could make arbitrary decisions without any legal oversight — a licensing decision without us or any private citizen the right to question or file litigation against it.”
Officials with both the auto dealers group and Tesla testified in front of a Senate Transportation, Infrastructure and Public Safety Committee, where the bill remains, in February.
Tesla officials say the legislation is another effort on behalf of the dealers to stop Tesla’s direct-to-consumer approach.
“Despite the Legislature and the courts both rejecting the Missouri Auto Dealers Association’s position in the past, the dealers continue to attack consumer choice by trying to force Tesla from selling its cars direct to residents,” a Tesla spokeswoman said in a statement provided to the Post-Dispatch. “Tesla wants to continue to invest and grow jobs in Missouri, while giving consumers the choice to buy the car they love. The proposed legislation is again anti-competitive and monopolistic, and Tesla will continue to fight for the rights of consumers and the many jobs that it has created in the state.”
Tesla doesn’t disclose sales by state but in testimony Monday, the company said there are more than 1,000 customers and more than 2,000 Model 3 reservation holders in Missouri.
The auto dealers association, along with several specific car dealers such as Jim Ternary Chevrolet and car makers including General Motors and Ford Motor Co., are financial donors to Schatz. Tesla has also given Schatz money.
Tesla is in the process of building a new store and service center in Chesterfield Valley in the old Kemp Auto Museum, at 16955 Chesterfield Airport Road. Plans call for a store and service center at the old museum, which has been closed since 2015. Caplaco Nineteen, a local development firm, is developing the project.
Justin Wyse, Chesterfield’s director of planning and development services, said that project remains on track. An opening date has not yet been announced.
Tesla has nine superchargers in Missouri with more planned.
Meanwhile, Ameren recently unveiled an approximately $18 million program that would incentivize the installation of about 1,200 charging plugs in its service territory that could serve as charging stations for electric vehicles. The company intends for the stations to be concentrated near interstate highway corridors, workplaces, multifamily housing and other public spaces, and to offer a combination of fast- and slow-charging services.
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