AP
Earlier this month, Connecticut lawmakers failed to take up a measure that would've allowed the electric carmaker to begin selling cars directly to customers at a limited number of locations in the state.
Under state law, automakers must sell cars through a third-party dealership, which Tesla has resisted.
Connecticut's failure to take up the bill is the latest stinging setback for the carmaker.
Even with heavy lobbying and the support of the Federal Trade Commission, last month, Tesla lost another battle to begin selling cars directly to consumers in Texas.
The results show that Tesla's strategy of supporting bills that allow a limited number of dealerships may not be as effective as the company hoped.
After coming up against fierce resistance from auto dealerships, Tesla tweaked its strategy to make the new laws more palatable for local lawmakers and dealerships. In many states where the electric carmaker is trying to open dealerships, Tesla is supporting bills that would cap the number of outlets that they could open, therefore posing less of a threat to third-party dealerships. In Colorado, for example, Tesla is allowed to sell cars to consumers at a single outlet.
On Wednesday, Tesla told the Associated Press that the carmaker will reevaluate their strategy following the loss in Connecticut.
"We would have been a bit stifled with the current concessions that we made," Tesla government relations manager Will Nicholas told the Associated Press.
Tesla's recent losses demonstrate the challenge that the electric carmaker faces. Despite demand for its vehicles, the automaker can't seem to overcome the political power wielded by third-party auto dealerships. Local car dealerships tend to be large donors to state and local politicians. In states like Texas, local dealerships are also large sources of tax revenue.
The opposition from dealerships nationwide has left the automaker with few options other than empty threats and willingness to keep doing battle.