Pennsylvania Assembly Approves Tesla Sales Expansion

Jul 03, 2014 11:12 AM EDT | Jordan Ecarma

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The Pennsylvania state House has passed legislation to allow Tesla Motors, which works through a direct sales model, to expand retail operations in the state.

The measure, which was approved by the Pennsylvania Senate last week, was passed by the House on Wednesday, Bloomberg Businessweek reported.

"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 a statement.

Headed by CEO Elon Musk, Tesla has sold its electric Model S sedan directly to customers, a system that skirts dealerships and has caused friction in a few states.

The Pennsylvania legislation, which will allow for as many as five Tesla locations in the state, must be signed by Gov. Tom Corbett before it becomes law.

According to O'Connell, the deal came about after cooperation with the Pennsylvania Automotive Association.

Tesla's direct-to-customers sales model has made dealerships uneasy and resulted in the automaker being put under various restrictions, depending on the state. The automaker has met with opposition in Arizona, Texas, Virginia and Maryland.

New Jersey previously took action to stop Tesla from selling, but the state assembly last month approved a bill that essentially creates a loophole for the electric carmaker.

Musk, who recently shook up the industry by opening up Tesla's patent collection, has been anything but conventional when it comes to the Palo Alto-based company.

"Tesla is seen as a kind of new, hip, up-and-coming company in the auto business," Karl Brauer, a senior analyst with Kelley Blue Book, told Businessweek by phone. "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."

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