It may not be exactly what Tesla Motors Inc (NASDAQ:TSLA) was hoping for but the company can consider this progress. The Connecticut House of Representatives has agreed to allow Tesla to operate three retail stores in the State. The automaker was hoping to open five stores but came up short as the State’s lawmakers moved to protect the interests of dealers who argue they might be negatively affected by the automaker if it was allowed to operate on a large scale. Tesla is facing similar battles in several states as their sales model challenges the traditional auto dealership model.
Something For Tesla to Celebrate
The Senate is the next stop in the approval process that will allow Tesla Motors Inc (NASDAQ:TSLA) to operate the three stores in the state. The Electric Vehicle giant has always emphasized the need to sell cars directly as one of the ways of meeting consumer choice while generating ingenuity and revenue. The limited exemption is a big win for Connecticut on one front as the state stands to generate up to $10 million in revenue from Tesla’s operations while the company creates 25 to 75 jobs.
The direct sales exemption has however elicited some concerns regarding why some bills are being passed that are only benefiting one company instead of the entire industry. General Motors Company (NYSE:GM) has been the loudest voice against Tesla being awarded direct sales licenses as it sells most of its cars through dealerships.
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Tesla Setbacks in Utah
A deal in Connecticut is a big achievement for Tesla Motors Inc (NASDAQ:TSLA) having experienced a series of setbacks in some states that have completely barred it from selling its vehicles. Utah is among the states where the automaker is struggling to convince lawmakers to allow the company to sell directly to consumers. Tesla has built a $3 million showroom in Salt Lake City
Tesla is essentially paying the price for building a showroom without having been given the go ahead for direct car sales. State legislators are engaged in talks with Utah car dealers working to find an amicable solution that would suit all parties. The results of those conversations remain to be seen.
Tesla opposes the selling of its cars through third party dealerships arguing that many dealers are focused on selling any car regardless of them being electric or running on gasoline. Car dealers on their part fear that if Tesla Motors Inc (NASDAQ:TSLA) is allowed to sell its own cars, it could trigger other manufacturers to ask for the same, something that could affect their profitability.