VA auto dealers sue Tesla, DMV over hearing to 'hide' proposed store

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Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

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The state-by-state battles between electric-car maker Tesla Motors and lobbyists for state auto-dealer interests often take unusual twists and turns.

But the situation in the state of Virginia may be among the odder episodes in Tesla's eight years of selling cars online directly to buyers.

In the Old Dominion state, the auto-dealers' trade group has sued not only Tesla but the state itself, alleging a conspiracy to 'hide' the opening of a second Tesla Store.

CHECK OUT: Where Can Tesla Legally Sell Cars Directly To You? State-By-State Map

As related last week in a Reuters article, the Virginia Automobile Dealers Association (VADA) sued both Tesla Motors and the state's Department of Motor Vehicles.

The suit, filed on March 9, alleges that DMV Richard Holcomb and Tesla are violating the terms of a 2013 agreement that prevents Tesla from opening a second facility in the state until 2017.

2016 Tesla Model X with 2011 Tesla Roadster Sport, photographed by owner Bonnie Norman

2016 Tesla Model X with 2011 Tesla Roadster Sport, photographed by owner Bonnie Norman

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It says that a hearing was set by Holcomb for March 31 on a request to open a second location—which the dealers' association learned about only when a member alerted it to a pending real-estate transaction in the city of Richmond.

VADA president Don Hall told Reuters that Tesla and the DMV were attempting to get the new store approved "very quickly, in the dark of the night, in hopes that no one could know about it."

ALSO SEE: FTC Calls Michigan's Tesla Ban 'Protectionism' For Dealers (May 2015)

Today, there is a single Tesla Store open in Virginia, located in the affluent neighborhood of Tysons Corners, close to the District of Columbia.

The patchwork quilt of state franchise laws that govern auto dealers largely used to ban car companies from opening sales outlets that would compete directly with those of their franchisees.

State map showing where Tesla Motors can (blue) and can't (red) sell cars [Mojo Motors, Mar 2015]

State map showing where Tesla Motors can (blue) and can't (red) sell cars [Mojo Motors, Mar 2015]

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Tesla, of course, has no franchised dealers to be protected.

But starting in 2010, auto-dealer lobbying groups have urged legislatures to tweak the language of the franchise laws to ban any sales operation by an automaker, period.

DON'T MISS: 'Numerous' Advantages To Laws Mandating Car Dealers, Tesla 'Inconvenient': NADA Chairman

It's entirely legal to buy a Tesla online, directly from the company, in many states (see map above), but not in other states.

The Federal Trade Commission appears to view such state laws with suspicion, and it held hearings early this year to look at auto sales and dealer regulation.

Thus far, no proposed legislative changes have come out of that day-long session.

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