Tesla Motors Inc. cut short a test-drive event in Iowa earlier this month after state regulators said the electric-vehicle maker was improperly acting as a dealer.
According to the Des Moines Register, Tesla began offering test drives in its Model S on Sept. 9 at a hotel in West Des Moines. The company canceled the third and final day of its program at the request of the Iowa Department of Transportation.
Paul Steier, director of the bureau of investigation and identity protection at the Iowa Department of Transportation, told Automotive News that Tesla’s test-drive event violated Iowa law requiring a license for any auto retailing activity.
Steier said he and a fellow investigator visited the event and talked to a Tesla representative, who acknowledged using a tablet computer to help some visitors initiate an online Tesla purchase. Regulators then spoke with Tesla’s legal counsel.
“We said we didn’t intend to charge them with any state criminal charge as long as they intended to stop what they were doing,” Steier said.
The Tesla representative, who suggested it was supposed to be a display-only event without any discussion of sales or prices, “didn’t disagree” that the activities may have violated the law, Steier said. The lawyer asked whether it would be OK to finish the test-drive event. Steier likened that to a driver getting stopped for speeding while late for work and asking the police officer whether it would be OK to keep speeding until arriving on the job.
Tesla did cancel the planned third day of the event at that point, he said.
Direct sales by manufacturers are not allowed in Iowa, Steier said.