Tesla Finally Lands Win In Ongoing Direct-Sales Battle

1 week ago by Steven Loveday 41

Tesla Store in San Francisco, California

The Missouri Court of Appeals ruled that three plaintiffs had no standing to follow through with a lawsuit banning Tesla from selling its cars directly in the state.

The Missouri Automobile Dealers Association (MADA), along with a local automobile dealer, and a mobile home manufacturer recently went to bat against the Silicon Valley automaker. A lower court had moved to revoke Tesla’s license to sell, but the appeals court overturned that ruling.

When then lower court ruled not to renew the automaker’s license, Tesla had to temporarily close up shop at its Kansas City and University City stores. However, the higher court allowed the company to immediately reopen during the appeal proceedings.

Tesla

Tesla retail boutique

MADA, Reuther Ford, and Osage Industries asserted that their right as economic competitors and taxpayers allowed them to sue Tesla in an attempt to get the automaker’s sales license revoked. The appeals court disagreed. The court believes that its ruling was:

 “… consistent with every appellate court ruling in the country that has addressed standing in similar Tesla license challenges in other states.”

The court basically said that it only appeals cases where a business license is denied or revoked. Simply being an economic competitor doesn’t give a company standing to bring forth a lawsuit.

MADA’s president, Doug Smith, is unhappy with the court’s ruling. He said:

“We feel very strong about the merits of our argument, and we’re a little disappointed in the final decision. It does have an impact on our industry.”

Welcome to the world of competition, right? Of course it has an impact, however, that doesn’t make Tesla’s way the wrong way. It’s just a different way. OEM dealerships shouldn’t be concerned about little tiny Tesla anyhow, but we digress …

Tesla

Dealers concerns are growing due to massive pre-orders for the Model 3.

Smith believes that there’s a certain way vehicles are supposed to be sold in Missouri, and the electric carmaker is doing it wrong. He continued:

“… you’re supposed to sell vehicles through the system that was created in the early ’80s. And until that system is modified or changed, that’s gonna be our stance.

… the Chinese manufacturer, or the Indian manufacturer, when it gets to the point where it can pass emissions and safety (tests) in the U.S., this is a model that they’ll look very strongly at, and that will have an impact on small businesses across Missouri.”

Needless to say, Tesla is enamored with the results, which could potentially strengthen precedents for future court cases. Tesla spokeswoman Gina Antonini shared:

“We have been serving customers in Missouri for almost five years and have contributed to the state economy and jobs for Missourians – something that will now continue.

… a victory for Missouri consumers who want the choice to learn about and purchase their Tesla in their home state.”

Source: Kcur.org

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41 responses to "Tesla Finally Lands Win In Ongoing Direct-Sales Battle"

  1. No matter how much a person, or a business, does not like how another person or business is doing things, that is irrelevant!

    What should be important to them, is to see if they can learn from the other person or business, and duplicate as much as possible, the things that are working for the other party, if they see they are falling behind!

    Or, take a Whole New Attitude to dealing with Customers! Start Respecting them more for what they are: the Life-blood of the Business and their more Powerful form of Advertising!

    1. Waiting says:

      AMEN!!!!

    2. SJC says:

      Legal standing has to show they are harmed, they have to compete, if that bothers them then quit talking about “free” market competition.

  2. ffbj says:

    Tesla showed them the state of things.

  3. Forever Green says:

    Go Tesla! 👍

  4. Murrysville EV says:

    Good – the mfr/dealer cartels need to be destroyed.

  5. CCIE says:

    Great to hear! The dealer model is parasitic, inefficient, and outdated. All car manufacturers will be better off when it’s no longer compulsory!

  6. floydboy says:

    After this, I believe we’re going to see a great deal of stalling going on in Michigan. Delaying anything happening as long as possible, especially if those ‘conversations’ to change the rules to keep Tesla out are damning!

  7. God/Bacardi says:

    The funny thing is the way “buying” cars is evolving…Reportedly over half of all EVs/PHEVs and luxury cars are leased…Reportedly you can get a Bolt EV in Cali for around $5000 total after all incentives were factored in…
    There will also be a lot more exotic lease/subscription services, Caddy has one where for $1500 in NY and L.A. you can drive any car you want and swap and Hyundai has an all inclusive of maintenance and insurance for a fixed monthly fee…

    1. Trytohigh says:

      Leasing is not buying, you are renting.

      1. Mikael says:

        That very much depends on how the leasing is done.
        I am leasing, but I am the owner of the car and bought it. When the leasing period is over there is an automatic buy-back at a guaranteed value made by the dealer so that they become the new owner.

        So when leasing I bought the car, not “bought”.

        1. (⌐■_■) Trollnonymous says:

          Technically the bank owns the car whether you lease or get a loan (to buy).

          At the end of the LEASE you either return the vehicle or, another transaction has to occur if you want to buy it or extend the LEASE.

          1. ItsNotAboutTheMoney says:

            No. The bank doesn’t own the car. The bank is a lienholder.

            A lien is “a right to keep possession of property belonging to another person until a debt owed by that person is discharged.”

            The bank has possession of the _title_. Without the title you cannot (legally) sell the car. But possession is _not_ the same as ownership.

        2. Trytohigh says:

          The option where you buy the car is a separate transaction from leasing the vehicle. Leasing is still renting.

          You either lease/finance/buy. Leasing is renting. Financing is borrowing. Buying is cash/check. Don’t undermine the word “buy” because you don’t see that many people these days actually pay the full amount for the vehicle they want.

      2. Alfred says:

        Given that most people who “buy” a car never pay off their loan before trading it it, your argument is pointless.

        Leasing involves a monthly payment and a lump sum payoff. Buying involves a higher monthly payment because the payoff amount built into the payment.

        Most people have zero interest in selling their old car when they want a new car so they trade them in and take whatever their poor negotiating skills can get them from the dealer. With a lease you know exactly what the vehicle will cost you, with a purchase you have no idea.

        So which is better? Neither and either, it all depends.

        Leasing new cars is something a lot of people enjoy. Fixed payments, term overlaps with bumper to bumper warranty, zero concerns, drop old car off when lease is up and move on. Other people want to buy a car, new or used, and drive it until the wheels fall off. More power to them too.

        But to those who always want to bring up “leasing isn’t buying”, find something better to do with your time.

        1. Pushmi-Pullyu says:

          Alfred said:

          “Given that most people who ‘buy’ a car never pay off their loan before trading it it, your argument is pointless.”

          Reminds me of the joke from the guy who said he drove his car to the bank twice a month to remind it of who its real owner was. 😉 And I don’t think he was talking about leasing, either!

        2. Trytohigh says:

          How very rude you come across to a stranger when you say “find something better to do with your time.” Do you say that to everyone whose views you don’t like or did I touch a nerve because you yourself rent (lease)?

          My argument is pointless? Another rude comment. You seem to be confusing “buying” with “financing” with your argument. You are a very misinformed fellow. Financing is borrowing, buying is cash/check.

          I’ll wager your age and/or where you live is what gives you the verve to speak to strangers on the internet this way.

  8. (⌐■_■) Trollnonymous says:

    I hate Stealersips.

    1. William says:

      Nothing a “Stealership” hates worse than some stiff competition, especially when the new competition, is not stiffing the old “Stealership” customers!

  9. Will says:

    Its that mid west and central states are in thier old ways, but they do have a point about other foriegn automakers coming in with this model and killing off the local dealerships that provide hundreds of job (trickle down) in thier communties. Tesla store over here in cleveland have no presence in the community compare to the dealerships that are always sponsing events and drives

    1. ffbj says:

      Yeah, they are good old boys, pointing out the new uniforms on the little-league with one hand while picking your pocket with the other.

      To paraphrase:
      ‘Dealerships have few defenders and no defense.’

    2. Alfred says:

      Dealerships don’t provide hundreds of local jobs because they sell vehicles, they have a few sales people.

      Those sales people still exist in a company owned store and vehicles still need servicing.

      Companies should have the right to be able to sell and market their products any way they want.

      Existing dealerships who whine about how that isn’t the way things have been done deserve to go out of business. And any legislator who falls for their line of bull and enacts anti-free enterprise legislation to force a car manufacturer to sell through a dealership should be recalled or voted out of office.

    3. Mark.ca says:

      We can always count on you, Will, to bring up the most insignificant arguments. Go to your favorite dealer and thank them for taking you for $5k on your last car purchase and donating $50 to your softball little league.

    4. Pushmi-Pullyu says:

      “…the local dealerships that provide hundreds of job (trickle down) in thier communties.”

      So, you’re defending the fundamentally dishonest business model of local car dealerships (and their service centers) on the basis that they provide jobs, or that they sponsor the local Little League team?

      I’d far rather see Tesla store reps and Tesla service center employees doing honest jobs! And earning an honest living, rather than propping up the “Good Old Boys” network of corrupt, protectionist politics.

      If the dealership business model can’t compete in sales against future models of EVs from Asia or elsewhere overseas, then that’s a good reason to expedite dumping that obsolete business model — not to prop it up!

    5. ItsNotAboutTheMoney says:

      If you were to buy a car direct from a manufacturer it will still need to be maintained and serviced.

      Buying from a local businesses does keep more money in the local economy, but in this case:
      – The vast majority of the car supply chain is not local, including a lot of dealerships, the distribution companies, the parts suppliers and the finance companies with which they deal
      – This is not local v national chain, it is direct v 3rd party: Tesla’s direct sales model is an attempt to eliminate a lot of the fat from the sales process.

  10. ffbj says:

    Utah, Louisiana, Connecticut, Texas and Michigan, ban Tesla sales, some others limit their store numbers or restrict them in other ways, Indiana, New Jersey, among them.

    1. Mike Ark says:

      Add Iowa to the list of states banning Tesla sales.

      1. Michael Will says:

        Time to sue them for damages of lost sales

  11. ffbj says:

    Me: I wonder how much it will cost to fix a specific problem.
    Dealership: Well, we always do a $150 diagnostic first.
    Me: I know what is wrong, I don’t need that.
    :Repeat Dealership line.
    Click* Me hanging up.

    1. (⌐■_■) Trollnonymous says:

      Exactly!
      I brought my pickup in knowing what needed to be changed…. “here’s my new widget, I need the old widget replased”…. and they said the exact thing. They ~Have~ to do the full diagnostics first.

      I went to a third party mechanic and said the same thing and they did the work.

  12. Kdawg says:

    What’s wrong w/selling products multiple ways? Some people buy Apple products from Walmart, some go to an Apple store, and some buy online. It doesn’t just have to be one way.

    1. (⌐■_■) Trollnonymous says:

      +1

      That’s how existing manufacturers should approach it.
      Instead they pay their lawyers and politicians to spin up or amend laws to try and stop the Tesla sales model.

    2. CCIE says:

      Options are great. But the current situation with most cars is like the government telling Apple they have to sell via Walmart and can’t sell at their own store. Distribution model should be up to each manufacturer.

      The exclusive dealership model needs to end. It’s anti-competitive and ridiculous.

    3. Alfred says:

      It’s entirely up to Apple whether they want to sell to Walmart for resell.

      Some manufacturers sell through multiple outlets, others restrict their product to company stores. Their choice, as it should be.

  13. Pushmi-Pullyu says:

    Wonderful news! Doubly so for me, since this affects our local Kansas City Tesla store.

    Illegitimi non carborundum.

    Go Tesla!

  14. Mister G says:

    GO TESLA GO DESTROY DIRTY GAS GUZZLERS AND DIESELS LOL
    Hey dealerships embrace the change or you will become dinosaurs BELIEVE ME CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

  15. Paul de Wit says:

    Since the inception of the internet it became quite clearly fast that middle man businesses would become obsolete.
    Look at retail. Dealerships and estate agents are next.

    I also wouldn’t start a cab company or seek a career that doesn’t require complex activity and or thinking as that can be easily automated.
    Or buy lots of share in fossil fuels.
    It’s amazing how people ignore what is to come and then get caught out. Totally unnecessary with a bit of vision.

  16. Bunny says:

    “Look at retail”
    I wouldn’t call Amazon nor Walmart (both middleman retailers) obsolete!
    That’s a nonsensical comment.
    That we have both, the competition is good for consumers.

    1. Nix says:

      Amazon is primarily an E-tailer, not a retailer.

      “Wal-Mart Stores” (legal name of WalMart) just changed their name by dropping the “Stores” and the hyphen to match their internet branding and to underscore their move into the E-tailer sector.

  17. Bunny says:

    Google the word e tailer
    And tell me the result

  18. Trytohigh says:

    This is fantastic news. Lynk & Co will be launching their first car in the U.S (2020) and it’ll be sold directly. The only catch is that you have to use Volvo dealerships for service.

    Getting rid rid of the mandatory middleman (very unfortunate U.S policy) is a step in the right direction.

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