Tesla Sued by Auto Dealers Association

Stephen Elmer
by Stephen Elmer

Tesla is facing lawsuits in both Massachusetts and New York from members of the Automotive Trade Association, saying that the electric-car maker is operating illegal dealerships in those states.

Factory-owned dealerships are prohibited in many states according to the National Automobile Dealers Association. “The big question for a lot of the states is do they have the kind of statute that addresses the issue of who’s allowed to be licensed to sell cars for their particular state,” said Mark Schienberg, president of the Greater New York Automobile Dealers Association.

Tesla says its boutiques are showrooms and nothing more. Instead, customers are directed to the company’s website for purchases. According to Tesla, the company complies with federal and state laws everywhere they are set up.

“They claim they’re operating under the guise of a non-sales showroom, and we call that out as an outright scam,” Robert O’Koniewski, executive vice president of the Massachusetts association said. These factory stores represent a problem to the association because they have a larger budget for advertising and facilities compared to dealers that are part of the association.

“We are looking down the road — what happens with China, what happens with India, with other manufacturers that come into the market,” he said. “We’re concerned about the precedent this sets.”

[Source: Automotive News]

Stephen Elmer
Stephen Elmer

Stephen covers all of the day-to-day events of the industry as the News Editor at AutoGuide, along with being the AG truck expert. His truck knowledge comes from working long days on the woodlot with pickups and driving straight trucks professionally. When not at his desk, Steve can be found playing his bass or riding his snowmobile or Sea-Doo. Find Stephen on <A title="@Selmer07 on Twitter" href="http://www.twitter.com/selmer07">Twitter</A> and <A title="Stephen on Google+" href="http://plus.google.com/117833131531784822251?rel=author">Google+</A>

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  • Robert T Robert T on Nov 02, 2012


  • MollyT MollyT on Nov 09, 2012

    Tesla's model for selling cars will transform the "horsetrading" model currently in place. I for one would love to be able to buy a car this easily. Now TESLA, make a car "the people" can afford. A simple, clean design with easy access cargo area for carrying dogs and garden dirt. Hurry up please, we need you.