Tesla Motors win suit to sell cars direct to the public

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Tesla Model S

Tesla has been opening stores in shopping malls across the US. Most states have antiquated laws that prevents auto manufactures from selling direct to consumers thus enforcing that sales are made through an independent dealer.  Of course dealers love this.

Tesla Model S in Bellevue Store - Right window Tesla Model S in Bellevue Store - Driver window Tesla Model S in Bellevue Store - Store FrontAfter opening a store in Natick Mall, Massachusetts, Tesla Motors has been embroiled in a battle to let it sell cars from the store.

Permission was granted for the store to sell vehicles back in December, and now a judge’s dismissal of a dealers’ lawsuit against the company has stepped a further direction in Tesla’s favor.

It all centres on state regulations about the Tesla Store’s legal identity.

Tesla Motors would not be allowed to sell cars itself, directly from the factory. The state requires franchisees to own dealerships, preventing companies from competing unfairly with independently owned dealerships.

Tesla CEO Elon Musk has previously weighed in on the matter, which has reached far beyond Massachusetts. Musk feels that franchised dealers, selling gasoline cars alongside electric vehicles, may not feel incentivized to put time and effort into electric vehicles–just in case they harm the dealer’s profits from regular vehicles.

Musk also says his stores offer a more pleasant, educational experience than traditional dealers.

Both the town selectmen back in December, and now Norfolk County Superior Court Judge Kenneth Fishman, have decided in Tesla’s favor that its store is legally separate from Tesla Motors.

Automotive News reports that the Massachusetts State Automobile Dealers Association is currently debating whether to appeal the ruling. The Association’s case hinges on dealers being able to sue for injunctive relief if they feel the public is being harmed. Of course as most consumers have little regard for car dealers this seems like a long shot.

It may also go to the state attorney general, which has enforcement power over state franchise law.

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