Tesla (TSLA) Expansion in Key Market May Be Clipped with New Legislation

Tesla Motors (Nasdaq: TSLA) is facing a roadblock from expanding in one if its key markets.

According to reports out Tuesday night, new legislation is being weighed in Washington state which would effectively prevent Tesla from opening more store around the Seattle area. It was reported earlier this year that the region was one of the best sales-per-capital ares for Tesla in all of 2013.

GeekWire quotes Tesla VP of Regulatory Affairs, James Chen, in saying that the proposed legislation basically freezes us where we are in opening new stores in the region. Here is Washington state, the leader in seeking clean power, clean air, clean water, and standing for innovation in technology, the home of Amazon.com, and yet there’s legislation that is basically stifling an innovative car company, an American car company, that is trying to get us off our dependence on foreign oil and reduce the emissions profile of the light duty vehicles, the executive quipped.

Washington state rep Reuven Carlyle commented to GeekWire, Tesla’s embrace of a direct, open competition sales approach is exactly what we say we want from old style, traditional industries to survive—innovation, creativity and an entrepreneurial spirit. The ridiculous notion that the political process in the Legislature should intervene in the marketplace of ideas in the automobile industry to prevent Tesla from direct sales is patronizing at best, and many of us are committed to defeating this special interest legislation.

The two bills in question are SB 6272 and the companion HB 2524.

Shares of Tesla are lower Wednesday morning.

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