Tesla Gains Ground in Direct Sales With Maryland Bill Signed

Updated on

Tesla Motors Inc. won another battle to bypass auto dealers as Maryland Governor Larry Hogan signed a bill allowing the electric-car maker to sell directly to consumers.

The new law permits manufacturers and distributors with “only electric or non-fossil-fuel-burning vehicles” to be authorized as auto dealers, according to a statement from the governor’s office. Known as the Tesla bill, it takes effect Oct. 1, allowing approved manufacturers to operate as many as four locations.

Hogan, a Republican, “has been adamant that we’re going to have a more business-friendly environment in the state of Maryland,” Christopher Carroll, deputy legislative officer in the governor’s office, said by phone after the signing Tuesday.

Under Chief Executive Officer Elon Musk, Tesla has been working state-by-state to ease restrictions on its direct-sales system. Georgia Governor Nathan Deal last week signed a bill that allowed Tesla to expand to five locations from three and removed the sales limit of 150 cars a year. That followed the approval in March by fellow Republican, Governor Chris Christie of New Jersey, of legislation that reversed a law preventing Tesla from bypassing dealers in the state.

“We hope this momentum combined with encouragement from independent entities, such as the Federal Trade Commission, will lead to direct sales in other states such as Connecticut, Michigan, Texas, and Arizona,” Diarmuid O’Connell, vice president of corporate and business development at Tesla, said in an e-mailed statement.

Tesla rose 2.2 percent to $244.74 at the close in New York time. The shares gained 10 percent this year, outpacing the 2.4 percent advance in the Russell 1000 Index.

(Updates with executive comment in the fifth paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE