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The Automobile Dealers Association in the state of Massachusetts was denied a request for a preliminary injunction against Tesla Motors Inc., which allows the American automaker to continue operating its store in Boston.
The dealers requested the Massachusetts Superior Court for a restraining order and injunction in hopes of stopping the Tesla-owned showroom from operating. The group is now considering an appeal and other judicial remedies, but currently hasn’t made a decision as to its next step.
“Tesla looks forward to continuing to focus on advancing the knowledge of EVs in a convenient, accessible environment,” said Shanna Hendriks, Tesla spokeswoman in an email. “We remain hopeful for a positive outcome of this case.”
SEE ALSO: Tesla Sued by Auto Dealers Association
One thing is for sure, the lawsuit isn’t going to be dropped any time soon according to Robert O’Koniewski, executive vice president of the Massachusetts association.
“Dropping the lawsuit is not an option at this point,” he said. “We feel very strongly that Tesla is operating a factory store outside parameters of our franchise law and our license law, and they are operating that store illegally.”
The injunction is part of an ongoing lawsuit in both Massachusetts and New York, where members of the Automotive Trade Association believe that Tesla is operating illegal dealerships in those states. The Tesla stores, which are mainly boutiques located in shopping malls and other high-traffic areas, have come under attack even though the automaker states that they comply with federal and state laws where they operate.
[Source: Automotive News]
By Jason Siu
Dealers in Massachusetts suing Tesla over what they say is an illegal dealership lost today when a judge dismissed the case from the court.
Norfolk County Superior Court Judge Kenneth Fishman ruled that the dealers association lacks the grounds to sue the American EV manufacturer.
SEE ALSO: Tesla Wins License to Sell Cars in Boston Suburb
The issue raised by the dealers association is a state franchise law which states that a factory cannot directly own a dealership. Tesla’s response was that no business is done at the dealership, and all cars are purchased online. The dealerships merely exist to showcase the vehicles.
The dealers association say that they will not stop trying to shut the dealer down, because of the precedent that will set.
[Source: Automotive News]
Unlike typical dealers, Tesla has a network of “stores” and “retail stores.” While reservations can be made for a new Model S or Roadster at the retail store, Tesla says other versions of the store merely direct potential customers to make their reservation online. Most of these boutique-style stores are in shopping malls, and Tesla asserts that they are not sales facilities. It’s an assertion with which traditional auto dealers are taking issue.
Dealers associations and networks across the country are doubling down their efforts to make Tesla’s OEM showroom network illegal. Tesla has opened 17 stores in 10 states, as well as the District of Columbia.
Dealership associations contend Tesla’s notion that sales are not made at these stores, stating that the showroom experience is still part of the sales process. To that end, dealer groups across the country have embarked in legal battles with the electric carmaker. The Illinois Secretary of State has informed Tesla that it is illegal to list CEO Elon Musk as the owner of its Chicago store. The Greater New York Automobile Dealers Association is looking into legal options against Telsa’s Westchester store, as well as two others in New York. In Massachusetts, the opening of a store in the suburban Natick Mall is having its legality challenged by the dealer association in that state. California has laws in place that allow for a manufacturer to run its own dealership, as long as it is not within 10 miles of an existing dealer. That practice caught the ire of Chrysler dealers when the American automaker opened its own multi-brand showroom near downtown Los Angeles.
Tesla says the way that its stores are run are unique to each location. According to George Blankenship, Tesla’s VP of sales, “If we can’t be a dealer in a mall, we won’t do reservations on-site. We tell people where to go on our website to make a reservation.” Blankenship is the former Apple retail guru and the mind behind the Apple Stores – an experience Tesla hopes to recreate in its own sales network. In the eyes of many dealers, that is a threat to their own dealership model. As Tesla seeks to open more stores in more states, this is unlikely to be the end of the pushback against the electric automaker.