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War Against Tesla Motors Inc (TSLA) Direct Sales Model Intensifies in Utah

Tesla Motors Inc (NASDAQ:TSLA) will soon be setting up shop in Brooklyn, New York. The electric car maker reportedly just signed a contract to lease the ground floor space of a building in Red Hook. The company already has a showroom in Chelsea. However, that contract allegedly stands to expire sometime around July. It seems like Tesla isn’t keen on renewing.

In other showroom-related news, Tesla Motors is yet again entering another state sales-related law suit. Similar to a few other states, law makers in Utah refuse to let the EV automaker sell its cars directly. A new bill has been proposed that would place restrictions on the EV giant’s sales. What’s even more inconvenient is that Tesla already has a showroom set up in the state. So its either sue for the right to sell cars or simply show people cars they can’t buy.

Tesla opens a showroom in Brooklyn

Look out, Brooklyn! Tesla is headed your way. The EV giant is reported to be opening its first showroom at 160 Van Brunt St. in Red Hook. According to the lease, Tesla will occupy around 40,000 square feet of the ground floor. Reports state that the building was once used as a storage warehouse but has since been converted into office space. It is owned by real estate developer LIVWRK.

But the electric automaker won’t just use this large and newly acquired space as a showroom alone. Tesla definitely knows when it’s time to get down to business. And when that time comes, it would probably be nice to have a set of offices nearby. This is why the leased space will also double as Tesla offices, as well as a service center.

Outlets report that Tesla is looking for a new space to set up shop in Manhattan as well.

Tesla can’t make direct sales in Utah

In Utah, Tesla Motors (NASDAQ:TSLA) is disputing a proposed bill that would place unfair restrictions on its car sales. The company already has a recently opened $3 million showroom in Salt Lake City. However, should the bill be passed, Tesla would not be allowed to keep its cars on the premises. Instead, the car maker would be forced to ship every order into the state, says Tesla’s Jim Chen.

“If Utah is really about free markets, if it’s really about innovation, if it’s really about new business models that provide the consumer with choice, why would you restrict that?” Chen offered.

Now Tesla is working on setting things right by means of a suit it filed before the state’s Supreme Court. The company also has the support of Utah’s Gov. Gary Herbert. Herbert is in favor of Tesla being able to sell its EVs directly and hopes that policy makers will come to a fair and justified settlement.

But if the bill is accepted, people will only be able to look at the luxury EVs on offer. Tesla owners will also be able to get their cars serviced there, but buying a car on the site or even discussing a price would be deemed unlawful.

In every state holding similar restrictions, Tesla Motors has stood firmly by its push to sell cars directly. The company insists that it can’t allow third parties to sell its cars. Tesla says one of the major reasons for this is that it has to convince buyers that its EVs are better that normal combustion engines. This would stand against the interests of many dealerships, so Tesla requires a site where it can pitch and sell its cars without any bias.

A few states have loosened their direct sales restrictions in order to let Tesla operate. West Jordan Republican Rep. Kim Coleman argues that the proposed bill would do the same. If accepted, though Tesla would not be allowed to sell on site, the company would be given a special license that allows the showroom glancers to make purchases online.

Tesla(NASDAQ:TSLA) opened its Salt Lake City showroom in March last year.

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