Electric carmaker Tesla scored a victory in its ongoing battle to sell directly to consumers when the Missouri Court of Appeals dismissed a lawsuit Tuesday that had sought to revoke its vehicle dealer license in the state. A three-judge panel overturned a lower court decision last year that had directed the state to not renew Tesla's motor vehicle license and briefly forced it to close its Missouri stores.
Tesla has been fighting state franchise laws that prohibit automakers from selling directly to consumers and instead require vehicles to be sold through independent dealers. Tesla's model involves selling its vehicles online and through its own stores, not through franchised dealerships. It operates nearly 100 stores across the country, including in Kansas City and suburban St. Louis, plus a number of service centers and galleries, which are not able to process sales orders.
Plaintiffs including the Missouri Automobile Dealers Association and Reuther Ford, a dealer in Herculaneum, Mo., had argued that as economic competitors and taxpayers, they were entitled to challenge Tesla's dealer license, public radio station KCUR-FM reports. The appeals court denied the plaintiff's standing, saying that the Missouri legislature limited appeals of licensing decisions to cases where licenses were denied or revoked and adding that its ruling was "consistent with every appellate court ruling in the country that has addressed standing in similar Tesla license challenges in other states."
Doug Smith, the president of the Missouri Automobile Dealers Association, told the station the trade group was studying whether to appeal to the state Supreme Court. If you're an automaker in Missouri, "you're supposed to sell vehicles through the system that was created in the early '80s," he told KCUR. "And until that system is modified or changed, that's gonna be our stance." He added that allowing Tesla to keep its license would open the door to direct sales from Chinese and Indian manufacturers and hurt existing small businesses.
A Tesla spokeswoman hailed the decision as "a victory for Missouri consumers who want the choice to learn about and purchase their Tesla in their home state."
Tesla's battle is far from over. It's still fighting dealer franchise laws in states like Texas, where it operates eight non-sales galleries, and in Michigan, where it recently opened its first standalone gallery.