MA Auto Dealers' Suit Against Tesla Dismissed By Judge

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Tesla Store  -  Portland OR

Tesla Store - Portland OR

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After 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 centers on state regulations about the Tesla Store's legal identity.

Tesla Motors [NSDQ:TSLA] 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.

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

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