North Carolina Looking to Ban Tesla Sales to Prevent ‘Unfair Competition’

May 15, 2013 10:54 AM EDT | Matt Mercuro

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The Tesla logo as seen on a vehicle in 2012. (Photo : Reuters)

A proposed bill in North Carolina would make it illegal for Tesla Motors to use its direct sales method to sell electric vehicles in the state.

The bill would prohibit car manufactures or dealers from selling their cars to consumers without using a licensed dealer according to ABC News. State Senate reportedly passed the bill in a unanimous vote on May 13.

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"We believe that Tesla, like all the other auto dealers in the state, should get a license, appoint a dealer, fall under the protection of the Department of Motor Vehicles, and sell cars," Robert Glaser, president of the North Carolina Automobile Dealers' Association said according to ABC News. 'We just want them to play by the same set of rules that the other 7,000 dealers in the state do."

If the bill goes through, car manufacturers would not be allowed to use a computer or other communication facilities, equipment or hardware to lease out or sell a vehicle to anyone in N.C. according to the legislation.

Click here to read the full legislation online.

The bill would basically mean car companies like Tesla would not be able to legally sell vehicles in the state if approved. Since Tesla currently avoids traditional dealerships by selling their models directly to consumers and allows people to place orders online, it wouldn't meet N.C.'s definition of a "dealer" according to ABC News.

Glaser supports the legislation and said that car manufactures have been banned from selling directly to consumers in N.C. since the mid-1970s. He added that the only thing the bill changes is who qualifies as a dealer, which was updated to include companies like Tesla that eliminate the use of state dealerships according to ABC News.

"This bill doesn't change the law at all. Somehow, they've been selling cars in North Carolina, you know, and I don't know how it compares to that law," Glaser said.

Tesla Motors was founded in 2003, and made headlines when it created the first all-electric sports car, the Tesla Roadster. The company calls the Model S the "world's first premium electric sedan," and is priced between $49,900 to $98,000 depending on battery options and equipment upgrades according to their company site.

Last quarter, Tesla reported its first-ever profit of $11.2 million, and its Model S earned a 99 rating from Consumer Reports last week.

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