An Arizona Senate panel has approved a bill giving electric car manufacturer Tesla Motors an exemption from rules requiring it to maintain a dealer network to sell cars in the state.

The Senate Commerce, Energy and Military Committee on Wednesday approved an amendment to an unrelated House bill giving Tesla the exemption.

House Bill 2123 was strongly opposed by traditional auto manufacturers and dealers. They argued that Tesla wants to operate outside the normal rules and that could leave consumers in the lurch if the company goes belly-up.

But bill sponsor Rep. Warren Peterson said dealers and manufacturers are trying to do is stifle innovation.

Tesla has a showroom in Scottsdale but can't sell cars there under a 2000 law. Instead, it takes orders online.