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Tesla Wins Another Court Battle

Dealership / Comments

The judge doesn't like how Tesla does business, but approved it anyway.

Most automakers sell their vehicles through independently owned dealerships. Not Tesla, though. The "disruptive" electric-vehicle manufacturer runs its own stores. That's ruffled some feathers among independent dealers, who have been known to take Tesla to court over the matter. But the outcome of the latest court battle ensures that Tesla will be able to continue selling its own cars in at least one US state.

That state (or "commonwealth") is Virginia, where a circuit-court judge upheld Tesla's exemption from state laws mandating that cars only be sold by independent dealers, and not by the automakers themselves.

The decision, according to Automotive News, results from a lawsuit filed with the Richmond Circuit Court by the Virginia Automobile Dealers Association, which appealed to overturn the decision of the state's motor-vehicle commissioner that allowed Tesla to run its own stores in the state. The company currently operates one of its stores in Glen Allen (on the outskirts of the state capital Richmond) and two more locations closer to DC in Tysons Corner. (Another store in downtown Washington is outside Virginia jurisdiction.)

It's not so much that Judge Gregory Rupe agreed with Commissioner Richard Holcomb's decision, but didn't find cause to overturn it, either.

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"Although this court disagrees with [the commissioner's] analysis, it has no doubt that the commissioner felt that he is serving the best interests of the people of this commonwealth," Judge Rupe wrote in his decision, noting at the same time that he is "troubled by the implications of the Tesla business model," which is "structured in such a way that no independent dealer could ever become profitable."

Tesla successfully argued that, even if allowed, no independent dealer could turn a profit selling its cars at a price competitive with the automaker's own stores.