Missouri is another in a series of states considering legislation to block Tesla from selling directly to consumers. (Photo: Tesla)
JEFFERSON CITY, Mo. – With only a week left in the Missouri Legislature’s 2014 regular session, an amendment was quietly added to a House bill that appears to have painted a target on the high-end electric automobile company Tesla.
On Wednesday, an amendment targeting the company was added by the State Senate to House Bill 1124, sponsored by Republican Rep. Glen Kolkmeyer. The language could prevent the company from implementing its direct-sales model in Missouri. While most automobile companies sell their cars through dealerships, Tesla opts to eliminate the middleman and sell directly to consumers.
“We have just become aware of a last-minute attempt by the auto dealers lobby, via pressure on legislators, to bar Tesla from selling its vehicles direct to consumers in the state,” read a post on the company’s blog. “This extraordinary maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri.”
Tesla currently has a facility in St. Louis and said on Thursday that it is planning to invest another $1 million in Kansas City later this year. The Kansas City facility would expand their investment in the state to $3 million and their staff to 30 employees.
Missouri is another in a series of states – including New Jersey, New York, and Ohio – where state legislatures targeted Tesla. The language is similar to a rule adopted in New Jersey earlier in the week that would require a franchise license to sell cars.
On Thursday, Tesla turned around and hired nearly a dozen lobbyists to fight the bill. Their team includes former House Speaker Steven Tilley, Danny Pfeifer, Harry Gallagher, and Heath Clarkston.
The Senate Substitute language was added to legislation which relates “to off-highway motorized vehicles.” The amendment notes the “express intent of the legislature to prevent any manufacturer of new motor vehicles from circumventing the public policy” contained in the Motor Vehicle Franchise Practices Act.
A spokeswoman for Tesla said Thursday Missouri’s current Motor Vehicle Franchise Practices Act is very clear: It prohibits franchisers from competing against their franchisees. For example, the act would bar General Motors from competing against a GM dealer. The company believes it currently acts within the law since they do not compete with any other franchise.
They have pointed to an opinion by the Federal Trade Commission, which claimed, “Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated.”
The Missouri Automobile Dealers Association has a powerful lobbying team in Jefferson City, itself. Their team includes John Bardgett, Andy Blunt, Phillip Schnieders, Jay Reichard, Johnny K. Richardson, and Doug Smith. The legislation is an initial strike against a potential move away from the dealership model for selling automobiles.
In their blog post (entitled “Trouble in Missouri”), Tesla said the “debate should be held in the full light of day with all sides being given an opportunity to make their case. Instead, the dealers are again trying to ram through a provision under the cover of darkness and without public debate.” The legislation, which was carried in the Senate by Jay Wasson, R-Springfield, was opposed by Sens. Dan Brown, R-Rolla, Brian Nieves, R-Washigton, and Gary Romine, R-Ste. Genevieve.
The bill, originally sponsored by Rep. Glenn Kolkmeyer, now sits on the House Bills With Senate Amendments Calendar. The broader bill “changes the laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles,” removing a handful of regulations. It also allows for a special license plate for female veterans.