The Missouri legislature concluded its current session without
voting on the bill that was restricting
Tesla Motors, Inc.
) ability to directly sell its vehicles in the state. Though the
bill was passed by the Senate, it needs the final vote from the
Missouri House to become a law. This means that Tesla can continue
to sell its cars in Missouri.
The original bill, HB 1124, had been in circulation since Dec
2013 and was passed by the House on Apr 17, without any ban on
direct sales. It dealt with laws regarding all-terrain vehicles,
recreational off-highway vehicles and utility vehicles.
Recently, the bill was passed by the Senate with altered
language. While the present law restricts franchisors from
competing against their franchisees, the amendment in the bill
would prohibit direct selling by any auto manufacturer.
This would have hurt Tesla's sales in the state as the automaker
insists on avoiding middlemen. The electric carmaker believes that
its direct-selling model reduces the price of vehicles and
facilitates higher sales. It also helps in properly marketing its
electric cars, as they are a relatively new technology.
Last week, the majority leader of the Missouri House revealed
that he was not in favor of the bill. Tesla also received support
from some staff members of the Federal Trade Commission, who
believe that restrictive vehicle distribution methods will harm
Tesla has a service center in St Louis, MO, employing 15 people.
To date, the company has invested $2 million in the state. The
automaker intends to open a larger service center in Kansas City,
MO, later in 2014, employing 15 people and thus investing an
additional $1 million in the state.
Tesla designs and manufactures electric vehicles and electric
vehicle powertrain components for partners such as
Toyota Motor Corp.
Tesla currently carries a Zacks Rank #4 (Sell).
), a Zacks Rank #1 (Strong Buy) stock, is currently performing well
in the automobile industry.
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