May 8, 2014 / 9:57 PM / 5 years ago

Missouri debates barring direct car sales in challenge to Tesla

A Tesla Motors logo is shown on a Tesla Model S at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014. REUTERS/Robert Galbraith

(Reuters) - Missouri legislators are considering banning car makers selling direct to the public, in another challenge to Tesla Motors Inc’s (TSLA.O) push to bypass car dealers.

A ban would make Missouri the fourth state after Texas, Arizona and New Jersey to stop Tesla selling its electric sports cars directly to drivers.

Missouri auto dealers have proposed new language in an existing bill that would force consumers to buy new vehicles only through franchised dealers, Tesla wrote on its blog. (

“Trouble in Missouri. Auto dealers trying to sneak in a monopoly creation bill today,” Tesla Chief Executive Elon Musk tweeted late on Thursday.

The bill with the new language, passed by the Senate on Wednesday, will go back to the House for a final vote,” the blog said.

Musk has long argued that car dealers are a bad fit for 11-year-old Tesla because they make more money from selling traditional cars than selling the company’s Model S.

Dealers say the franchise system, in which automakers rely on a network of independent dealers to sell cars, offers an extra layer of accountability for consumers. They argue that competition between dealers also lowers car prices.

Reporting by Sweta Singh; Editing by Joyjeet Das

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