Tesla fears closing service centers in Oklahoma as new bill passes committee

Tesla fears closing its stores and service centers in Oklahoma because a new bill banning direct sales and service from the automaker has unanimously passed a House committee, and is headed for a vote.

To date, there are few states that prohibit Tesla and other automakers from selling directly to consumers.

This is due to outdated laws protecting franchise dealerships against automakers trying to compete with those who have invested a lot of money in providing a sales and service workforce for them. It made a lot of sense.

But now, those same laws are being used to stop Tesla and other new automakers that never had franchise dealerships competing against dealers selling vehicles from other automakers — using it as a competitor. – is being done in an antithetical way.

Many states have changed direct sales laws to avoid this abuse, which gave third-party dealers a monopoly on car sales, but there is still some abuse and efforts by dealer unions – which have a lot to do with state politics. The power is – to prohibit direct selling.

In Oklahoma, there’s a new effort that Tesla fears will block its current business from operating in the state.

Last month, we reported on the automaker reaching out to its fans to counter a new bill being considered in the state’s House Business and Commerce Committee.

At the time, Tesla argued that the bill could also force the company to close its locations in the state:

If passed, the bill could force Tesla to close its existing locations in Oklahoma and prevent Tesla from shipping cars to anyone in the state who service their cars to locals. Will force you to move to or out of state to pick up your new Tesla vehicles. Oklahoma should focus on increasing revenue and jobs in the state, not reducing competition and limiting consumer choice.

Now, the bill has officially passed the House Business and Commerce Committee, and surprisingly, it did it unanimously:

It goes to the House for a possible vote by the end of the month. The bill’s sponsor, Representative Mike Dobrynsky, has been in the car dealership business with his family for decades — the automaker is asking fans to contact their representative to let them know if they oppose the bill.

If the bill goes through law, Tesla may have to close its locations in the state, but it may have another solution.

In New Mexico, Tesla found a loophole in the state’s direct sales ban by building a location on tribal land. There’s also a lot of tribal land in Oklahoma where Tesla could potentially make a similar arrangement.

This new attempt to ban direct sales came after Oklahoma took out the red carpet for Tesla in an attempt to persuade the automaker to build a factory in the state, but the company ultimately decided to move to Texas.

However, the state has since convinced another EV maker, Canu, to come in a state-approved millions in incentive to secure a factory in Oklahoma.

Canu has also indicated that it plans to use the direct sales model and may be affected by this bill.

Not that it will mandatorily bar it to build a manufacturing facility in the state, though. Tesla went with Texas, even though the state also has direct sales regulations that ban automakers from selling directly to customers.

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