Boston, MA 06/27/2014 (wallstreetpr) – Tesla Motors Inc (NASDAQ:TSLA) has moved an important milestone in its market war in Pennsylvania. However, the company has the customers and legislators to thank for its latest state-by-state war against franchise dealers.
A piece of legislation that seek to allow Tesla to operate factory-owned stores in Pennsylvania state received the endorsement of the state’s Senate this week, and the matter now moves to Pennsylvania House, where the bill will be subjected to further consideration.
Special treatment
Tesla Motors Inc (NASDAQ:TSLA) is waging a state-by-state war to be allowed to sell its electric cars directly to customers. However, franchise dealers are opposed to such arrangements as they consider it as giving undue advantage to Tesla against rivals. Nonetheless, Tesla maintains that its cars require elaborate explanation to buyers that only insiders can provide, and that makes it important for the company to operate factory-owned dealer shops.
If the legislation in Pennsylvania goes through, the company will be allowed to operate five dealer shops in the state. However, that follows an amendment of the bill because the original version of the bill did not impose a cap on the number of stores the company can operate in the state. Nonetheless, the development signals a compromise and the company will operate in the state without fear of being challenged legally over its business model by franchise dealers.
Limited number of stores
Tesla Motors Inc (NASDAQ:TSLA) has already been allowed to own and operate a limited number of stores in states such as New York and Ohio. In New York and Ohio, the company is allowed to operate fives and three stores, respectively. The number of stores the company is allowed to operate in New Jersey is expected to be capped at four.
Tesla is bad news
In Pennsylvania, Tesla Motors Inc (NASDAQ:TSLA) not only faced off with franchise dealers, but also automakers that felt its business model was dangerous to their operations.
Tesla is already bad news to the conventional automobile makers because its electric cars are billed as safer than traditional cars, and they are also environmentally friendly, which makes them the best pick of clean environment advocates.
