Tesla's model of company - owned retail outlets and Internet sales is unproven and could run afoul of
dealer franchise laws in some U.S. states and European countries.
Not exact matches
«Licensing
laws have typically been fairly strict on who can sell a motor vehicle because of the possibility of fraud,» explains Jim Moors, director of
franchising and state
law with the National Automobile
Dealers Association.
Dealers say Tesla was circumventing
dealer -
franchise laws that exist in every state.
Dealers have responded by convincing their state legislatures to pass
franchise laws that protect their businesses by limiting what actions an auto maker can take.
The OEM lists contain information about each new car
dealer, including the legal name of the business under State
law, physical address, mailing address, tax identification number, State business license number, OEM
franchise identification number, and a primary contact at the
dealer.
Dealers in Massachusetts and New York have already filed suit against Tesla, saying that Tesla's retail setup, which uses corporate owned «galleries» that show off cars and allow people to place deposits via the internet, violates existing automotive
franchise laws.
Now, according to Automotive News, Tesla has filed an appeal to overturn the ruling, continuing the fight between Tesla CEO Elon Musk and the
laws which currently favor the
franchised dealer model followed by all other automakers in the U.S.
If the
franchise dealer system is really better, then it will succeed despite Tesla's efforts, without the help of
franchise laws.»
A hodgepodge of
franchise laws in various states, designed to protect local auto
dealers from competition, effectively means that new cars need to be sold through a local
dealer.
Existing
law allows ANY manufacturer to apply for a
dealer license without the use of independent
franchised dealers.
«Devoted to current developments of Puerto Rico's
franchising and distribution
laws, including the
Dealer's Contract
Law 75 and Sales Representative
Law 21.»
One member of our team has taught a
law school class on
franchising and
dealer law, and we write and speak regularly on these specialized areas.
Used by a
franchised motor vehicle
dealer to request that a grievance with the franchisor be heard before a DMV administrative
law judge.