Now, one that runs on ethanol would be a different matter

But an electric car in Iowa?  Get a horse;

Iowa’s transportation department is telling Tesla Motors to stop offering test drives in the state because doing so is illegal, reports the Des Moines Register. Iowa’s DOT apparently said the test drives–conducted by Tesla in West Des Moines earlier this month–were illegal because Tesla isn’t a licensed auto dealer in Iowa, and that state law bans auto manufacturers from selling vehicles directly to consumers.

And the members of the Iowa legislature--as do politicians almost everywhere--like the campaign contributions that come from its state's auto dealers.  Which might dry up if Tesla isn't prevented from competing with those dealers.

All in the name of protecting Iowa's consumers, of course.