Missouri car dealers sue state over Tesla's direct sales

JEFFERSON CITY, Mo. -- The Missouri Automobile Dealers Association is suing the state revenue department for allowing electric car maker Tesla Motors to sell directly to consumers rather than using a dealership as a middleman.

The car dealers, including Reuther Ford Inc. and Osage Industries Inc., filed a lawsuit Thursday in Cole County Circuit Court claiming the department violated state law by licensing the California-based manufacturer as a franchise.

Department of Revenue spokeswoman Michelle Gleba said the agency doesn't comment on pending litigation.

Car manufacturers typically provide cars to a franchised dealership to sell, but the department in 2013 licensed Tesla to sell its vehicles in a University City facility.

The lawsuit filed this week claims the department "created a non-level playing field where one entity -- Tesla -- is subject to preferential treatment and all bona fide dealers are discriminated against."

The suit claims no other car manufacturer in Missouri has those powers.

The traditional dealer-franchise model for selling new cars, the lawsuit states, protects the consumer by providing a local point for test drives and service.

But Tesla said buying directly from the company eliminates an unnecessary intermediary.

The lawsuit is an attempt to "create a distribution monopoly that will decrease competition, hurt consumer choice, and limit economic investment in Missouri," said Diarmuid O'Connell, Tesla's vice president of corporate and business development, in a written statement.

Tesla has come under fire before, both in Missouri and other states.

Lawmakers last year proposed failed legislation that would have banned Tesla from selling vehicles directly to consumers. The car maker has fought similar legislative battles in New Jersey, New York and Ohio.