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Virginia auto dealers are suing Tesla and the state to stop the automaker from opening a store


It seems like Tesla’s problems with direct sales laws are endless. After two consecutive small wins in Indiana and Utah, where state committees decided to temporarily table bills that would have prohibited Tesla to sell its cars directly to consumers, now the Virginia Automobile Dealers Association (VADA) filed a lawsuit against Tesla and the state’s Department of Motor Vehicles commissioner, Richard D. Holcomb, to stop the automaker from opening a second store in the state, according to Reuters.

Last year, Tesla opened a retail location in northern Virginia near Washington, D.C. and in Virginia, like in a few other states such as New York, Tesla struck a deal to be able sell its electric vehicles directly to consumers in a limited number of stores.

Now VADA claims in its suit that Tesla is violating this 2013 agreement restraining the automaker from opening a second store in the state until at least August 2017.

VADA President Don Hall claims Tesla is trying to open a new locations in Richmond, something he learned through backchannels after a real estate deal for property in the area. According to the dealership association, the location would violate the 2013 agreement. Hall said while talking with Reuters:

“They tried to get this done very quickly, in the dark of the night, in hopes that no one could know about it,”

Tesla has yet to comment on the story.

The company faces a similar problem in Utah where the company gave up on the legislative process and is now bringing the matter to the State Supreme Court. While in Connecticut, Senate Majority Leader Bob Duff introduced a bill that would allow electric car manufacturers to sell their vehicles directly to Connecticut consumers, again in a limited number of stores. Tesla is supporting the initiative, but it is also facing strong opposition from auto dealers.

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  1. Fabian - 7 years ago


  2. roger tyler - 7 years ago

    What a short sighted group they are!

  3. James Rowland - 7 years ago

    What’s actually going on: Incumbents are trying to impose their dumb business model on a newcomer.

  4. jednoucelovy - 7 years ago

    America, WTF? This is capitalism?

    • quiviran - 7 years ago

      “Capitalism” (or free markets) is the mantra to keep Government from delivering products or services the incumbent private players don’t want to deliver. “Don’t derail my gravy train” is the mantra when they see a real threat to the status quo on the horizon. America has a choice to make, whether to try to keep up with the rest of the world or to keep giving mouth-to-mouth resuscitation to the dinosaurs. I hope we choose wisely and don’t waste a lot of time dragging our collective feet.

  5. Businesses that engage in what are clearly unfair and anti-competitive activities should be treated harshly.

  6. Nathanael - 7 years ago

    VADA doesn’t have a case at all. They’re operating based on speculation! Maybe Tesla’s bought property for a Supercharger site. Or a service center. Or a testing laboratory. Or anything. They have no evidence that Tesla plans to open a store at all! And based on this article, Tesla would be totally within its rights to open a store in September 2017 anyway!

    VADA should be fined heavily for filing frivolous lawsuits.


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