North Carolina targets Tesla, considers banning direct-to-consumer sales

North Carolina is the latest state to line up against Tesla Motors by proposing a bill that would bar direct automaker-to-customer sales within the state, the Raleigh News & Observer reports. Still, Tesla says plans to open a showroom there and has sold about 80 cars to North Carolina residents, with reservations for about 60 more.

According to Slate, a bill pushed by the state's Senate Commerce Committee – and backed, of course, by the North Carolina Automobile Dealers Association (NCADA) – would not only prevent Tesla from opening a showroom in North Carolina, it would go as far as banning Internet vehicle sales in the Tar Heel state. We're not sure how that would be enforced, but it would certainly crimp the success Tesla has had without using the traditional industry dealer distribution model. The bill is sponsored by state Sen. Tom Apodaca (R), who claims the goal is to stop unfair competition between manufacturers and dealers (as Slate notes, Apodaca also received $8,000 from the NCADA last year, the most allowed by law). Tesla's vice president for corporate and business development, Diarmuid O'Connell, argues that the bill is "a protectionist move to lock down the market so we have to go through the middleman – the dealer – to sell our cars."

Texas, Massachusetts, Minnesota and New York are among states that have so far taken issue with Tesla's dealer-free distribution model, prompting Musk to say last month that he'd consider going to Congress to try and get factory-to-customer sales legalized throughout the country. Musk is likely emboldened by the fact that Tesla earned its first quarterly profit this year and sold more of its Model S electric vehicles than General Motors and Nissan did of their Chevrolet Volt extended-range plug-in and Leaf EV, respectively.