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Tesla Motors vs Minnesota Automobile Dealers, Tesla Wins First Round

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Are Tesla Stores Threatening Automobile Dealers?
Are Tesla Stores Threatening Automobile Dealers?

Last week, Tesla Motors won the first round against the Minnesota Automobile Dealers Association, but the fight isn’t over yet.

Most states have laws that prevent automakers from selling their own vehicles in competition with franchisers of the same automobile. The laws make sense, since an automaker could seriously undercut pricing on the very same automobiles that the franchises are trying to make profits on.

Some state dealer associations aren’t particularly happy to see Tesla Motors putting Tesla Stores into their neighborhoods, including Massachusetts last year, and now the Minnesota Automobile Dealers Association.

I’m not really sure what the fight is about, but let’s consider the facts. First, there are no Tesla Motors franchises that Tesla Stores would be competing against, so the law actually doesn’t apply to Tesla Motors.

Second, aside from flailing Fisker Automotive, there isn’t a single make or model anywhere near the Tesla Model S class, so Tesla Stores aren’t actually taking away business from any other automaker. I’m sure Fisker would have said something by now if they had an issue with it. Finally, according to Tesla Motors, the Tesla Store is simply a showroom, and sales is online.

You’ve got to love it when the Massachusetts and Minnesota Automobile Dealers realized they’d been licked by their own laws. So, what is there to do but frame mischief by law and make a law that says that no manufacturer can have its own store. Legislators, on the other hand, don’t agree. Friday, a Minnesota Senate committee voted down the proposed bill. The fight isn’t over yet, and a Minnesota Assembly hearing is scheduled for Wednesday to consider its own version of the bill.

“Minnesota auto dealers tried to pass legislation to block Tesla Stores. Bill was just defeated in Senate. Thanks MN!” – Elon Musk, CEO of Tesla Motors, via Twitter.

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