(Updated 10:20 a.m. Tuesday, May 13)
With Tesla electric cars parked in front of the Missouri Capitol, legislators have found themselves in an unexpected battle over a provision in a Senate bill that the automaker says would effectively kill its Missouri operations.
The provision would prohibit vehicle manufacturers, such as Tesla Motors, from selling products directly to customers -- requiring them instead to set up dealerships.
The dispute has succeeded in generating a rare bipartisan coalition of conservative tax party activists and progressive consumer advocates who have joined forces against the provision.
Late Monday, there appeared to be confusion in the House over the matter. House Majority Leader John Diehl, R-Town and Country, initially related in a text message to St. Louis Public Radio that the House had told the Senate to remove the anti-Tesla provision, or to agree to go to conference to discuss the issue.
"Bottom line is, we are not taking the language in the current bill,'' Diehl wrote.
But later, he reported in a subsequent text that things had changed. "No action on bill at this time," Diehl wrote. "No clear path forward."
In an interview Tuesday morning, House Speaker Tim Jones offered a similar assessment. "We're going to have to vet this through the House,'' he said, although acknowledging that there was only a few days left to do so, since the session must end at 6 p.m. Friday.
Speaking in general, Jones noted that the risk was that the entire bill -- which generally deals with all-terrain vehicles -- could die if a deal over Tesla isn't achieved. "The bill becomes paralyzed,'' he said.
State Rep. Stanley Cox, R-Sedalia and chairman of the House Judiciary Committee, had announced earlier Monday that he and state Rep. Chris Kelly, D-Columbia, were leading the House opposition to the provision. The legislators and their allies -- including the Farm Equipment Manufacturers Association -- say the provision is anti-free market, anti-consumer and was improperly slipped into Senate legislation last week without most senators’ knowledge.
State Sen. Mike Kehoe, R-Jefferson City, is a key backer of the provision. He said that Tesla otherwise stands to benefit from "an uneven playing field'' that would hurt auto dealers who have "invested in the facilities, who are employing Missourians and following the letter of the law to be in business."
Diarmuid O’Connell, Tesla Motors vice president, told reporters in a conference call Monday that the provision, if it becomes law, threatens the firm’s $2 million investment in Missouri. Tesla has a St. Louis operations office and plans to add one soon in Kansas City.
It’s unclear how many Tesla vehicles have been sold in Missouri. Supporters put the number at around 150. The vehicles aren’t cheap, with various vehicle-price websites posting base prices on Tesla models ranging from about $60,000 to $100,000.
Missouri isn’t only the state where the electric-car manufacturer believes it is under siege. A similar dealership requirement recently was put in place in New Jersey.
Dealers group main force behind proposal
The Missouri Automobile Dealers Association – an influential group in the Capitol – appears to be the primary force behind the provision, which was added last week to the Senate bill dealing with all-terrain vehicles. The association says it’s not anti-Tesla but believes that consumers are best served when dealerships handle auto sales and related issues.
Association president Doug Smith said in a statement, “For more than 30 years, Missourians have purchased their vehicles through our current franchise system, which protects consumers and promotes market competition. Simply put, the system has worked for Missouri businesses and consumers.”
He contended that Tesla Motors currently was benefiting from “a loophole in the law that has allowed them to sell their cars with an unfair competitive advantage.”
Moore said Monday’s full-court press by the provision’s critics was proof of its effectiveness. He also denied that the provision was slipped in secretly.
Cox and Kelly contended that it was the dealers who were out to choke off competition from the still-fledgling electric-car industry. “As Republicans we should be embracing free-market competition and pro-growth policies, not creating monopolies to protect special interests,” said Cox. “The last thing we need in Missouri is to be passing burdensome regulations that send a message to job creators from across this country that we aren’t open for business. This legislation is nothing more than an unnecessary intrusion by state government in our economy.”
Meanwhile, Craig Huegen of Carlisle Lake, Ill., said he drove his Tesla to the state Capitol simply to underscore his support for the car.
Huegen said he purchased the Tesla online and that he has had no problems with it.
“I get about 250 miles on a single charge. And I leave the house every day – never have to stop by a gas station,” Huegen said. “Just drive, plug in at night and you’re ready to go the next morning with a full charge.”
He added that driving a Tesla is akin to “driving a rocket every single day.”