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Why Tesla Can Keep Selling its Cars Directly to Indiana Residents

Feb 26, 2016

Tesla (tsla) gets to continue selling its cars to Indiana residents directly, at least for now.

Indiana lawmakers decided on Thursday to send proposed legislation known as the "Kill Tesla" bill to a summer study committee—effectively putting the bill on hold until at least next year, according to the Indy Star.

The bill, which the Indiana House already passed earlier this month, would ban auto manufacturers from directly selling their vehicles to consumers—Tesla's model—and instead require them to use the franchise dealership model used by traditional automakers.

Tesla would either have to find a franchise dealer in Indiana to work with by 2018, or stop selling its vehicles in the state.

General Motors (gm) has lobbied for the legislation, arguing that it's a matter of creating a level playing field for all companies selling similar products. GM recently unveiled the Chevy Bolt, an electric vehicle that is considered a mainstream, affordable response to Tesla. The Senate Commerce and Technology Committee decision to table the bill was a small victory for Tesla, which has fought with traditional automakers in a number of states to sell its vehicles directly to consumers.

In a statement to Fortune Thursday, GM spokesman Chris Meagher wrote that " GM is very pleased that we were able to elevate the issue of disparity impacting our dealer partners in Indiana, that this received as much attention as it did, and that this issue advanced as far as it did." He added that GM will continue to challenge Tesla " anywhere we find market participants are operating under different rules."

Tesla's general counsel Todd Maron told the Indy Star that the company looks forward to participating in the summer study process.

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