Tesla wants Massachusetts direct sales ruling to mean more

Wed, Oct 8 2014

The approximately 8,300 square miles of Massachusetts may be a relative speck on the US map, but Tesla Motors is hoping a recent court decision there could have a big impact on potential sales and the legality of Tesla's distribution system throughout the rest of the country. Tesla, writes Automotive News, says that the reasoning behind a judge's decision to throw out a lawsuit against the company is broadly applicable. Now, the California-based automaker has New Jersey in its sights.

Because Tesla doesn't have any existing distribution set-up in Massachusetts involving a third-party franchisee, the company isn't violating any statutes by opening a factory-owned dealership, the Massachusetts judge ruled. Tesla is saying that the judge's interpretation is applicable to other states such as New Jersey, which has outlawed Tesla's direct-to-consumer sales of its electric vehicles. And for that reason, the decision that forced Tesla to convert its New Jersey sales stores to Tesla galleries where sales are prohibited should be reversed.

Of course, dealer representatives in New Jersey said the Massachusetts decision has no bearing in their state. Meanwhile, Texas, Arizona and Maryland are among other states where Tesla has been prohibited from selling vehicles direct because of existing dealership laws. This should get interesting.

By Danny King