Lawmakers in Pennsylvania approved the petition of Tesla to do direct selling in the state despite opposition of auto dealer groups.
The Senate passed a legislation that will allow Tesla to open up to five stores in Pennsylvania and open more service centers. Once Governor Tom Corbett signs the legislation, Tesla officially wins the battle.
"We hope the process in Pennsylvania serves as an example for how productive cooperation can lead to a win for all parties involved, dealers and legislators included," Diarmuid O'Connell, Tesla's vice president for business development, said in the statement, cited by Businessweek.
This development is good news for the electric car company which recently won a similar battle in New Jersey. Tesla was banned from selling its cars in to protect the interest of traditional car dealers in the state. Last month, the state general assembly passed a bill that will allow Tesla to operate up to four stores and is now awaiting approval from the Senate and Gov. Chris Christie.
Tesla is still battling to take on Arizona, New Arizona, Ohio and Texas, as well. For now, it plans to put up a new store in Devon, N.J., as an additional to its existing store in King Prussia. The company also has service centers in Devon and Norristown.
So how does Tesla manage to bypass the rules of state franchise laws? Karl Brauer, a senior analyst with Kelley Blue Book, explained that the traditional auto dealers' eagerness to shut off Tesla makes people more interested in innovation.
"Tesla is seen as a kind of new, hip, up-and-coming company in the auto business," Brauer said in a phone interview with Businessweek. "Some of the initial reactions against them by dealers in other states may have backfired a bit on the dealers -- making them seem a little too tied to the past."
Legal experts told the Wall Street Journal that Tesla winning the franchise battles could open doors for other companies to set up direct sales networks. Existing companies might also attempt to create new subsidiaries, similar to the tactic used by Ford and General Motors in the late 1990s.
