Add another state where the EV automaker is now allowed direct sales.
Tesla has won a critical case in Delaware's Supreme Court with a ruling allowing the carmaker to maintain its direct sales model. According to the Associated Press, the state's Supreme Court overturned a judge's ruling in a lower court that prohibited Tesla from selling its vehicles to consumers directly.
Last year, a Superior Court judge ruled that the state's Motor Vehicle Franchising Practices Act did not allow Tesla to maintain its business model in the state. The Supreme Court reversed that ruling and sent the case back to the Superior Court.
"We reverse the DMV Director's decision and the Superior Court judgment and remand for further proceedings consistent with this opinion," the Supreme Court said.
"The General Assembly enacted the Franchise Act to address the disparity in bargaining power, which permitted new motor vehicle manufacturers to exert economic pressure over their franchises. Its definitions exclude Tesla and its direct sales model, where new electric cars are not sold through franchised dealers in Delaware," the statement further read.
Dealership franchise laws were enacted decades ago to allow for competition that would benefit consumers. Ironically, those dealers and the powerful lobby representing them are using these laws to stop the competition from doing business.
Delaware is only one among several states where Tesla has been battling for the legal right to directly sell the Model S, 3, X, and Y.
Last September, the carmaker said it planned to fight a sales ban in Louisiana and, before that, succeed in New Mexico by taking advantage of a legal loophole.
Tesla's victory in Delaware is also excellent news for Lucid and Rivian, two other EV automakers that utilize direct sales though neither currently has a physical sales location in the state just yet. The direct sales model directly threatens the long-running status quo, hence the dealership lobby's decision to fight it so hard. Neither side is willing to step down.
Legacy automakers, such as Ford, closely monitor how consumers respond to direct sales. The Blue Oval announced it's applying a no-haggle, online direct sales platform to European customers. Dealers will still be required as a source for test drives, deliveries, and service visits.
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