Tesla Vs Natick, Massachusetts – Future Of Boutique Stores On The Line?
Tesla’s answer to the town of Natick’s suggestion that their boutique mall dealership location may not comply with state (Massachusetts) licensing rules looked to be an easy solve of the problem-“we won’t sell cars there”, but that doesn’t seem to be holding water with the Greater Boston Area town of about 35,000, or with its existing auto dealers.
Town Counsel person, David DeLuca in an email response to Tesla’s lawyer stated that without sales at the mall it “raises the obvious question as to where and when do actual sales occur.” He went out to say that Natick is allowed to only issue a license to an applicant that maintains its primary business in the town.
Scott Silverman, an attorney representing the Massachusetts State Automobile Dealers Association, and who had originally approved a Class 1 license for Tesla in May, along several Natick dealerships, said it was unclear if Tesla will meet several license requirements, including having a service center near the Natick Mall.
Through their lawyer, Tesla wrote a letter (dated July 6) that the company has a lease for property in Watertown that will house the service facility. But Silverman has said, at 15 miles (and in another city) that is too far away.
“I don’t know of any other dealer in the state that would have their service facility anywhere near half as far as that facility. Ninety to 95 percent of service centers are on the same property as a dealership or on adjacent property.”
Tesla’s official position on the intended use of the boutique location remains unchanged, “All that this location can do is accept a reservation for a car to be built-to-order at a later date. The actual binding contract between the customer and the company does not occur at this location but occurs later in the process when the car is ready for final production.”
Billy Donley, who represents Tesla in the matter, also provided the town with a copy of a dealership agreement between Tesla Motors and Tesla Motors MA, but the larger issue here, as Silverman has questioned, is whether that met a prohibition on manufacturer-owned dealerships. “I know they might be introducing some progressive ideas, but you can’t gloss over what everyone else is required to comply with,” Silverman said.
The legal wrangling continues, and the fate of Tesla’s boutique stores may be on the line.