• Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Show Me InstituteShow Me Institute
Show Me InstituteShow Me Institute
Support the Show-Me Institute
  • Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Economy / Regulation

Road Blocked for Tesla in Missouri

By Michael Highsmith on Sep 20, 2016

Over the past decade, Tesla has made a name for itself in the automotive industry through innovative design and the noble goal of reducing every human’s carbon footprint. While Tesla is looking toward a brighter future, it seems that automotive regulations are living in the past. Tesla has been operating dealerships in Missouri for a few years now, but last week a Cole County judge ruled that its current business model violates state law.

The ruling comes from a lawsuit filed by the Missouri Automobile Dealers Association (MADA) against the Missouri Department of Revenue. MADA argues that allowing Tesla to sell directly to consumers is forbidden by the Motor Vehicle Franchise Practices Act (MVFPA) and that the DOR was mistaken in granting a dealer’s license to Tesla. The law requires manufacturers to sell cars via a franchise agreement with a car dealer, but Tesla argues that the two (manufacturer and franchisee) can be one and the same. In other words, Tesla established an agreement with Tesla to sell Tesla’s cars.

Regardless of whether Tesla is exploiting a loophole in the current legislation, to me the real question is whether the law should effectively prohibit a manufacturer from selling to consumers. While dealerships can reduce a manufacturer’s burdens regarding advertising, selling, and maintaining cars for consumers, does it make sense to “force” a third party into the mix? Given that dealerships tend to provide insufficient information on electric cars, and that direct manufacturer sales can lower distribution costs, it’s difficult to see the rationale behind limiting consumers’ decisions regarding how to purchase a car.  

Tesla is bringing innovation into Missouri’s automobile industry, and to shun such innovation is a missed opportunity. Regulations such as the MVFPA should be in place to serve consumers, not protect specific dealerships. If they don’t do this, then perhaps it’s time for an updated business model.

  • Share
  • Tweet
  • Share
  • Email
  • Print
About the author

Michael Highsmith

More about this author >
    Footer Logo
    Support the Show-Me-Institute
    Showmeinstitute.org is brought to you by Show-Me Institute and Show-Me Opportunity.
    • Publications
    • Blog
    • Events
    • Donate
    • About
    • Contact

    Reprint permission for Show-Me Institute publications and commentaries is hereby granted, provided that proper credit is given to the author. We request, but do not require, that those who reprint our material notify us of publication for our records: [email protected]

    Mission Statement
    Advancing liberty with responsibility by promoting market solutions for Missouri public policy.

    © Copyright 2023 All Rights Reserved