Tesla takes a win for direct sales in Utah, bill to allow operating its own stores goes to the governor

Tesla might finally be able to sell its cars directly to consumers in Utah after an important bill was approved in the house and senate. It’s now going to the governor.

The automaker has had a rough time in Utah. The company thought that it could operate in the state under the current law, so it built a $3 million store in Salt Lake City in 2015, but the full-fledged store was demoted to a gallery/service center two weeks before opening due to the Utah attorney general’s office ruling that it was against the state’s direct sales law.

They have since obtained a used car dealer license and they have sued the state for the right to sell, but they lost the direct sales lawsuit in the Utah Supreme court last year.

After going through the court, the automaker tried again through the legislature with a new bill (H.B. 369) introduced by Rep. Kim F. Coleman last month.

The bill was approved in both the House and Senate this week. It’s now going to the governor’s office where no issue is expected.

It went a lot smoother for Tesla in this legislative session than in the automaker’s previous attempt.The Senate voted 26-1 to approve the bill – only Sen. Don Ipson, R-St. George, voted against it.

Tesla sent the following statement to Electrek about the passing of the new bill:

“The legislation passed today will allow consumers the right to buy new Tesla cars and energy products directly in the State of Utah. We are appreciative of Rep. Coleman and Sen. Bramble’s leadership in crafting legislation that both Tesla and the Utah Automobile Dealer Association could support. This is proof that allowing Tesla to sell its products directly does not conflict with the business of existing dealerships. We look forward to growing our presence and adding good jobs in the years ahead.”

Tesla brought out the big guns for its lobbying effort this time around and set up shop on Utah’s Capitol Hill to give Model S and Model X test drives to legislators last month ahead of the vote on the bill (pictures by Patrick Wiggings):

It looks like the effort was successful and the automaker should soon be allowed to operate its own stores and service centers in the state.

As we recently reported, Tesla revived old and launched new efforts to allow direct sales in more than 5 states last month in a push with new state legislative sessions opening this year.

The company is trying to fix the issues ahead of the broader rollout of the Model 3, which will enable Tesla to increase its fleet and retail presence in smaller states.

Electrek’s Take

Hopefully, it’s one of at least a few wins in the many legislative efforts launched this year.

There’s only a handful of states that outright ban Tesla’s business model right now and it will be interesting to see which one will be the last, which is not a desirable position to be in if you want to promote the free market and not look like you are in the pocket of car dealers.

I think it could come down to Texas and Michigan since Tesla can’t go back to legislators until next year in the former and the lawsuit against the latter could still last a long time.

What do you think? Let us know in the comment section below.