Tesla Stock (NASDAQ:TSLA) Slips as Tesla Loses Direct Sales Advantage in Washington State

Electric vehicle giant Tesla TSLA -0.60% ▼ enjoyed a bit of an advantage in at least one state: Washington. But that advantage is about to be removed, and with it, exclusive access to a direct sales channel. This is not good news, though not particularly terrible, and investors reflected this loss accordingly. Tesla shares slipped fractionally in Wednesday afternoon’s trading.

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Previously, Tesla was the only one who could sell electric vehicles directly to consumers in the state of Washington, which meant Tesla did not need to set up dealerships in order to sell to individuals therein. But with Senate Bill 6354 passing by overwhelming margins—84-9 in the House and 47-2 in the Senate—Tesla competitors now get access to those same sales channels.

The exclusive arrangement was in place for 12 years prior to this move, which now awaits the governor’s signature to go into law. This is actually good news for Washington residents as well as competitors like Rivian RIVN -0.88% ▼ . Originally, Washington residents could walk into a Rivian showroom, sit in an R1T, and ask questions. But the law forbade asking about financing terms, and forced interested buyers to go to Oregon or buy online.

Battery Tech on Trial

Tesla also found a different advantage under fire, as its battery technology was the subject of a legal battle. Tesla’s carefully guarded battery system, known as the Dry Battery Electrode system, is at stake, and a former Tesla supplier is claiming victory thanks to a recent arbitration ruling.

Have high conviction in TSLA? Leverage your view

The supplier, Matthews International MATW -1.33% ▼ , claimed arbitrators confirmed its right to “…develop and sell its proprietary DBE solutions.” This led Tesla vice-president Bonne Eggleston to declare: “Buyer beware: Matthews International stole Tesla’s DBE technology and is now subject to an injunction and liable for damages. During our work with Matthews, we caught them red-handed copy ing our technology, including proprietary software and sensitive mechanical designs….”

Is Tesla a Buy, Hold or Sell?

Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 11 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 69.28% rally in its share price over the past year, the average TSLA price target of $399.25 per share implies 0.39% upside potential.

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