Tesla fears having to shut down its stores and service centers in Oklahoma as a new bill banning direct sales and service from automaker has passed a House committee unanimously, and it’s heading to a vote.
To this day, there are still some states that prevent Tesla and other automakers from selling directly to consumers.
This is because of old laws put in place to protect franchise dealerships against automakers trying to compete with the people who invested a lot of money into providing a sale and service workforce for them. It made a lot of sense.
But now, those same laws are being used to prevent Tesla and other new automakers who never had franchise dealerships from competing against dealers who sell vehicles from other automakers – it’s being used in an anti-competitive way.
Several states have changed those direct sale laws in order to avoid this misuse that gave a monopoly on car sales to third-party dealers, but there are still some misuses out there and efforts from dealers associations – which have a lot of power in state politics – to outlaw direct sales.
In Oklahoma, there’s a new effort that Tesla fears will prevent them from operating its current business in the state.
Last month, we reported on the automaker reaching out to its fans to try countering a new bill being considered in the state’s House Business and Commerce Committee.
At the time, Tesla argued that the bill could even force the company to shut down its locations in the state:
If passed, this bill could force Tesla to close its existing locations in Oklahoma AND prevent Tesla from shipping cars to anyone in the state, which would force locals to travel out-of-state to service their cars or pick up their new Tesla vehicles. Oklahoma should focus on increasing revenue and jobs in the state, not stifling competition and limiting consumer choice.
Now, the bill has officially passed the House Business and Commerce Committee, and surprisingly, it did it unanimously:
It is headed to the house for a possible vote by the end of the month. The sponsor of the bill, representative Mike Dobrinski, has been in the car dealership business for decades along with his family – the automaker is asking fans to contact their representative to let them know that they oppose the bill.
If the bill does go through the legislation, Tesla could have to shut down its locations in the state, but it could have another solution.
In New Mexico, Tesla found a loophole to the state’s direct sale ban by building a location on tribal land. Oklahoma also has a lot of tribal land where Tesla could potentially make a similar arrangement.
This new effort to ban direct sales comes just after Oklahoma pulled out the red carpet for Tesla in trying to convince the automaker to build a factory in the state, but the company ultimately decided to go to Texas instead.
However, the state has since convinced Canoo, another EV maker, to come to the state-approved millions in incentive to secure a factory in Oklahoma.
Canoo has also indicated that it plans to use the direct sale model and could be affected by this bill.
Not that it would necessarily stop it to build a manufacturing facility in the state, though. Tesla went with Texas, even though the state also has direct sale regulations banning automakers from selling directly to customers.
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