Tesla Motors can sell electric cars directly to Pennsylvania drivers(Read article summary)
Pennsylvania's House of Representatives has passed legislation allowing Tesla Motors to sell through its first-party retail store model. That said, Tesla Motors will probably face a cap of five stores.
Tesla's long battle against state franchise laws is still underway, but every so often it does get a boost of positive news.
That latest boost comes from Pennsylvania, where the state's House of Representatives has passed legislation allowing Tesla Motors [NSDQ:TSLA] to sell through its first-party retail store model.
Advocates of Tesla will be pleased to hear the news, letting Pennsylvania residents buy their Model S sedans the way Tesla intended.
Surprisingly, the state's bill faced surprisingly little resistance from the state's auto dealers association, unlike those of some other states.
Many automobile dealers associations, including the powerful National Automobile Dealers Association, have fought against Tesla's distribution model. Many fear other automakers would want to adopt a similar model – rendering traditional dealers obsolete.
Lack of resistance in Pennsylvania could be down to a clause in the bill limiting the number of stores Tesla can open.
According to the Wall Street Journal, the legislation caps this number at five stores.
The Car Connection also suggests that Tesla's popularity among its fans and the public--and fear of backlash from those fans if Tesla is prevented from selling via its retail store model – could force the overturning of franchise laws altogether.
Ohio and New York have recently adopted similar legislation, allowing Tesla's sales model but limiting the number of stores they can open – good news for Tesla, and enough to placate auto dealers. A further bill in New Jersey is currently pending.
Tesla has released a statement saying, "We hope the process in Pennsylvania serves as an example for how productive cooperation can lead to a win for all parties involved, dealers and legislators included."