Virginia Auto Dealers Can Sue Tesla Over Second Store
The fight continues.
Tesla’s legal challenges in Virginia have been long and complicated. In 2013, the company made a deal with the Virginia Department of Motor Vehicles and the Virginia Automobile Dealers Association (ADA) to open up one store in the state. This was in addition to a service center in Northern Virginia. Everything seemed peaceful (sort of) until Tesla said it wanted to open up a second store. That move is causing problems.
Last November, Tesla got permission from the state Department of Motor Vehicles to open a second store. The judge in that case said, “After careful review of the entire record, I find that there is no dealer independent of Tesla in the community or trade area of Richmond, Virginia, to own and operate a Tesla franchise in a manner consistent with the public interest.” The Washington Post reports that it is legal for an automaker to sell its cars directly to the public if there is no dealer “available.” Tesla argues that since its electric vehicles are sold at a specified price, don’t need oil changes or other regular maintenance that ICE vehicles do, and since they take longer to sell, they’re just not a good fit for traditional dealers. “A dealer who cannot stay in business is not ‘available’ in any real-world sense,” Tesla lawyers wrote in a filing.
Dealers disagree, unsurprisingly, and want to put legal roadblocks up against Tesla’s expansion in the state. The AP reports that the Virginia ADA has now gotten permission from a Richmond Circuit Court judge to take Tesla to court over the proposed second dealership. Tesla wants to open a store in Henrico County this summer, but the Virginia ADA thinks that the California automaker should use independent dealerships just like other automakers.
Tesla’s customer-to-customer referral program was also deemed to be illegal in Virginia.