North Carolina is one step closer to banning Tesla cars in the state after a bill passed the state Senate requiring the high-end electric vehicles to be sold only through a dealership.
The bill would technically require all auto makers to sell their cars through a dealer but only Tesla, which relies on selling cars direct to consumers, would be affected.
The bill would require Tesla to go through the state's system of 7,000 franchised dealers and is being heavily pushed by the North Carolina Automobile Dealers Association.
Sen. Tom Apodaca, a Republican who sponsored the bill, said the bill is designed to prevent "unfair competition".
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Tesla’s vice president of corporate and business development, Diarmuid O'Connell, told Slate magazine that the company has already sold 80 cars in North Carolina, mostly online, and has about 60 more orders in the works.
"[Tesla] also has plans to build its first showroom in the state next year," Slate's Will Oremus wrote. "The Raleigh-Durham Research Triangle in particular appears to be a hotbed of Tesla interest, O'Connell said, which makes sense given its similarities to Silicon Valley."
The state's car dealerships are concerned that Tesla's direct-to-consumer model will put them out of business.
"We care about the franchise system," Robert Glaser, president of the N.C. Automobile Dealers Association told the News Observer. "The whole point of the retail system is to protect the consumer."
Tesla might be giving the traditional auto industry reason to worry. The 10-year-old company, based in Palo Alto, Calif., recently blew past analysts estimates and posted its first quarterly profit.
Tesla initially expected to sell 4,500 of its Model S electric cars in the first quarter. Instead, the company said it sold roughly 4,900 of the cars.
The vehicles sell for between $70,000 and $100,000 depending on the features.
Tesla is expected to sell about 21,000 cars in the full year, about 1,000 more than an earlier goal.