West Virginia bans Tesla direct sales

The legislation was promoted by WV Senate President Bill Cole, a franchised dealer for Honda, Nissan, Kia, Subaru and Hyundai.

West Virginia Governor Ray Tomblin has signed into law a bill that will bar Tesla Motors from selling directly to customers in the state.

The state may not be at the top of Tesla's priority list, but it nonetheless serves as a blow to the company's battle against dealer franchise laws in a handful of US states, following on the heels of a victory in New Jersey.

The legislation was supported by Senate President Bill Cole, a franchised auto dealer with Honda, Nissan, Kia, Subaru and Hyundai showrooms in West Virginia and neighboring Kentucky. The West Virginia Automobile & Truck Dealers Association is also listed as one of his top campaign donors, according to FollowTheMoney.org.

The bill included wording that prohibits a manufacturer from acting "in the capacity of a new motor vehicle dealer." The company had reportedly lobbied for an amendment that would allow non-franchisor manufacturers to sell directly at a limited number of stores, however the provision was rejected, the West Virginia dealer association's president, Ruth Lemmon, said in a statement to Automotive News.

"I just can't understand why if you want to be in the auto transportation business, why you wouldn't want to be part of a proven model," she opined.

Tesla has not yet publicly commented on the setback.

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