Tesla Wins A Battle Against Dealership Association With Natick Showroom Opening Today

SEP 28 2012 BY JAY COLE 5

Tesla won a battle of sorts against the Massachusetts State Automobile Dealers Association (and several other concerned Natick dealerships), who were not pleased that the company had filed for a Class 1 license last May to sell cars in a mall outlet in the state.  

After a protracted battle with the town and the association’s lawyer, Tesla opened its 26th “dealership” in the city of about 30,000 today…although it can’t legally sell any cars at the location

Tesla Has Opened 26 "Dealerships" ACross The US

Tesla initially had been approved as a full dealerhips at the mall-boutique outlet, but that was before scott Silverman, an attorney representing the Massachusetts State Automobile Dealers Association got involed.

At the time, Mr. Silverman said it wasn’t clear if Tesla met license requirements; specifically, Tesla had to have a service center near the Natick Mall outlet.  Tesla said it had leased a property to house a service center is nearby Waterton, but Silverman argued that at 15 miles away, and located in another city, that was not good enough.

“All that this location can do is accept a reservation for a car to be built-to-order at a later date,” Tesla said in a letter. “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.”

In prior actions, and regardless of the outcome, Tesla said the Natick mall outlook would showcase the cars even if they did not have the ability to physically sell them there or not.

Today, as Tesla made good on that promise,  George Blankenship, a Tesla Motors VP craftily mugged for the media, “What I really want to do is inform you about our car” he said, as he showed an interactive touch-screen display on a new Tesla Model S.

Mr. Blankenship also noted that the area around the Natick Mall was “an affluent, educated area,” and that was also a common profile amongst the company’s 12,000 (actually 13,000) reservation holders.

Dealership #25 Was Recently Opened In Roosevelt Field Mall In Garden City, New York

Unable to stop Tesla from opening a display-only boutique, Scott Silverman now says the association has no issues with Tesla running a display at the mall.

“They did not satisfy the requirements to act as a car dealer or sell cars from the mall.  “My understanding and expectation is all they’re doing is displaying cars.”

After seeing the car, if customers are interested in purchasing the new Model S, or reserving an upcoming Model X, they are directly to the internet, where the company currently accepts $5,000 reservations.  Final financing and delivery arrangements are made later, and not at the Natick location.

It is interesting to note, in promoting the opening of the boutique, Tesla said the following on their Facebook page (without noting the distinction between display showroom and dealership):

“Boston is about to Go Electric! Tesla’s newest store opens tomorrow at Natick Mall!”

Much like how the internet has transformed the monopolistic hold Realtors had on consumer’s ability to buy and sell a house, this is seen as the “first chink in the armor”of  the traditional way of buying cars.


MetroWest Daily News

Categories: General, Tesla


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5 Comments on "Tesla Wins A Battle Against Dealership Association With Natick Showroom Opening Today"

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I don’t think we should be forced to buy at a dealership if we don’t want to.

Indeed. Good riddance!

And Tesla has the service option to get the service to come to your home…..


Hurray for Tesla! I think it is ridiculous for there to be laws restricting consumer choice. By cutting out the dealership, Tesla can sell with significantly smaller margin. No commission sales also eliminates the rug bazaar style selling where the salesman sizes up the customer and tries to sell for maximum profit. With Tesla’s fixed price nobody feels gouged or wonders if they should have gotten a better deal. All this means much better value for the customer.

I think this is a good step for Tesla who obviously has to slowly build up their dealer network as they grow. But ultimately you MUST have dealers in some form. It’s a critical part of the customer service experience. I love my BMW dealership and that’s one of the things that would make it a very tough decision to consider another brand. I don’t think anyone should be able to dictate to Tesla what their dealerships should be. It should be up to them to innovate the customer service experience. But let’s not think dealerships themselves will go away. And besides, I’d say TrueCar was a much bigger blow to the traditional car sales process.