Utah Supreme Court rules against Tesla in push to sell cars

Tesla’s push to sell its all-electric vehicles in Utah hit another roadblock Monday when the state Supreme Court upheld a decision by Utah licensing officials to deny the automaker a license to sell new cars.

Tesla had argued that a state law barring car manufacturers from owning dealerships didn’t apply to the company. Tesla sells its cars directly to customers rather than using independent dealerships, something Tesla attorneys argued is vital to their business.

Tesla must sell its own cars because a sale depends on convincing customers that electric cars are better than those with a gas engine. The company also argued that Utah law doesn’t block car makers from selling directly, it only blocks car makers from owning a dealership that’s set up as a franchise.

In the decision Monday, Supreme Court justices didn’t address whether Utah law blocks a car maker from selling its vehicles directly or whether it’s vital for the car maker to sell its own product.

The justices instead focused on a subsidiary company that Tesla set up to sell cars in the state, called Tesla UT. Tesla UT applied for an auto dealer license, and because Tesla UT is wholly owned by Tesla, state licensing officials were correct in a 2015 decision denying the license, the justices wrote.

In a statement, Tesla said the ruling was “disappointing for Tesla and all Utah consumers interested in consumer choice, free markets, and sustainable energy.” The company said it will pursue all options in Utah and will continue offering service in Utah for Tesla cars. (AP)