We'll let Tesla Motors founder Elon Musk write the lede on this one: "Mass. judge denies auto dealers' demand to kill our little Tesla store," Musk said in a tweet on Tuesday. "Yay, justice prevails."

Indeed, a Massachusetts judge has denied a request among auto dealers to restrict the electric-vehicle maker from operating its own retail stores, according to Automotive Week reports. The ruling appears to be a departure of sorts from the "church and state" set-up of vehicle makers and dealers, in which the auto companies are required to grant franchises instead of selling the vehicles themselves.

In this case, Tesla, so far, is cleared to open a retail store outside of Boston. The Massachusetts State Automobile Dealers Association, which sued Tesla last month, may appeal the decision, while the National Automobile Dealers Association (NADA) declined to comment. NADA said late last month that it was looking to meet with Tesla executives to re-think the idea of opening company-owned retail stores, and added that it would provide legal support for dealer groups that decided to take action against Tesla.

Ever the non-traditionalist, Musk has long argued that a franchised dealer would likely lack the knowledge necessary to provide expertise on the EVs.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 100 Comments
      Val
      • 5 Months Ago
      Why is it not a dealership? Because there are no DEALS made in it. Simple as that. Because it doesn't have much stock on hand? No, because it doesn't have ANY sock on hand. None of the vehicles there are for sale, they could just as easily put vehicles without batteries and motors, for people to sit in, and nobody would know the difference.
      • 2 Years Ago
      Which mall?
      purrpullberra
      • 2 Years Ago
      Rotation just thinks they are dealerships so it must be.... But no responses to my 10 item list of steps required to buy a car that do not and cannot be done at a Tesla store. If(!) you had responded I'd give you a bit of respect but you just went, 'well, whatever, the judge decides'. Duh. What are YOUR responses to my list? When do you talk financing? When do talk trade ins? Where do papers get signed? When/where do you promise to buy the car? Who takes the deposits? No one at the stores can do any of this. There is nothing saying they can't show off the car, brag a bit. They just can't sell. And the word 'sell' can't be hijacked just because you 'think' its more of a dealership. Your opinion means nothing when reality clearly shows you're wrong. The judge even said as much. Its just like the delusional 'conservatives' bubble that tricked them into believing they had the election in hand. Wrong. Wrong wrong wrong. A dealership is a specific entity and to be one certain actions and processes must be present. The stores are much closer to non-staffed information booths than they are to dealerships. Anyone's anecdotal 'evidence' is meaningless compared to these issues I bring up. Rotation & Marco Let's meet up here the day AB posts the ruling and if I'm wrong I'll donate $50 to the GOP. And acknowledge your rightness.
        marcopolo
        • 5 Months Ago
        @purrpullberra
        @ purrpullberra What the hell are you talking about ? How on earth do you drag the GOP into this ? Why all the yelling and screaming ? No one, certainly not the dealers, have accused Tesla of being "criminals or fools". Perhaps, if you calmed down and thought of these laws as 'trade regulations" rather than part of the "criminal code", you might gain a better perspective. Instead of inventing 'enemies', you calmly looked a the issues from both sides you would see the merit of both Tesla's, and the NDA's position. In these sort's of disputes, there is often no 'black and white', position ! The issue is simple; Should Auto-mobiles be sold by factory owned outlets. Tesla want's to try a new way of marketing motor vehicles, based on a system where Tesla controls every aspect from manufacture to the retail sale. Tesla would argue that it's product's unique and the development of the internet, has rendered older marketing models out of date. The NDA, argues that Tesla is just a manufacturer of Auto-mobiles with a different energy technology, but is still subject to the existing laws. The NDA would point out the laws were originally passed to prevent undesirable control of every level of the Auto-industry by manufacturers and are still relevant. The NDA argues that the law(s) were designed to prevent manufactures controlling the retail process, and Tesla stores are just a part of that process. Both of these arguments have merit. Most of these laws (regulations) were passed against the old major auto-makers by both Democrat and GOP administrations. Both sides will offer examples, Tesla would argue that if Apple can operate stores, why can't Tesla ? Both systems can co-exist. The NDA, will counter with examples within the motor industry why this would be undesirable. The NDA, would also argue that in many countries Apple must establish a wholesale price for it's products and establish dealerships. These haven't proved insurmountable problems for Apple. This dispute has nothing to do with EV technology, nor left-right politics ! It's about factory owned outlets. The NDA would be just as vigilant if Tesla was selling a diesel engined car by factory owned retail outlets. Like Electron and Carney, you are seeing sinister aspects that just don't exist !
      noevfud
      • 2 Years Ago
      Let's get rid of all the parasites and extra margin and hold manufacturers more accountable for sales. This law was nonsense.
        Thereminator
        • 5 Months Ago
        @noevfud
        Really...this sounds like "special interest" law that only decreases competition while raising prices with middlemen.The next step is to apply this protectionist type law to the internet...right? Its sad how those who would argue for economic micromanagement...ignore knowing what "Free" enterprise actually is.
      SVX pearlie
      • 5 Months Ago
      @Rotation: It goes on to say: "A manufacturer or distributor shall not be in violation of this paragraph when: (i) owning or operating a dealership temporarily for a reasonable period, in any case not to exceed 1 year; " It appears as long as Tesla closes each "temporary" location by the 1 year anniversary, then can operate as many dealerships as they so choose in full compliance of the letter of the law. If that dealership has not been in operation for at least 1 year, no violation has been committed.
      purrpullberra
      • 2 Years Ago
      Marco- you always go to the 'religion' lines when you are the one who is religious about the wonderful independent dealership network. Why won't separate independently owned dealerships work? Because they just want profit out sales, any sales, any product. They have nothing to do with ensuring the car is the only issue, not getting ripped-off or getting a worse deal than others. Dealers are much closer to being THE problem not the solution. You are bright that they will need to accommodate new buyers who will need other services but I expect Tesla to forgo anything independent of Tesla. They will figure it out.
      Grendal
      • 2 Years Ago
      After reading through the Massachusetts law: http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93B (Thanks Rotation and LTAW) I think Tesla is fine and the point the judge made will stand. Tesla is breaking no laws from what I could see. I saw no definition of Dealership that would define the Tesla store as such. The laws are all about protecting dealerships from unfair trade practices from a manufacturer. Tesla is not trying to do this and NADA is stretching the laws to try and fit Tesla into their structure. No harm is being done to the public or to any dealership or franchise. If a large manufacturer attempted to do the same thing then the law is there to protect a dealership from their unfair trade practice. Tesla is cutting no one out. Tesla has an entirely different business model. Should Tesla get big enough to monopolize the EV market then something could possibly happen. But that isn't going to happen anytime soon.
        Letstakeawalk
        • 5 Months Ago
        @Grendal
        Dealerships are defined, in a different section: "(b) Class 1. Any person who is a recognized agent of a motor vehicle manufacturer or a seller of motor vehicles made by such manufacturer whose authority to sell the same is created by a written contract with such manufacturer or with some person authorized in writing by such manufacturer to enter into such contract, and whose principal business is the sale of new motor vehicles, the purchase and sale of second hand motor vehicles being incidental or secondary thereto, may be granted an agent’s or a seller’s license; provided, that with respect to second hand motor vehicles purchased for the purpose of sale or exchange and not taken in trade for new motor vehicles, such dealer shall be subject to all provisions of this chapter applicable to holders of licenses of Class 2, except subsection (c), and to rules and regulations made under those provisions; and provided further, that such dealer maintains or demonstrates access to repair facilities sufficient to enable him to satisfy the warranty repair obligations imposed by section 7N1/4 of chapter 90, and shall remain liable for all warranty repairs made and other obligations imposed by said section 7N1/4 of said chapter 90. " http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140/Section58 This is a Class 1 Dealership License - the kind of license *anyone* who wants to sell new cars is required to have.
          Nick Kordich
          • 5 Months Ago
          @Letstakeawalk
          @Letstakeawalk - from a business perspective, a gallery store is marketing, not sales. It's a 3D walk-in billboard - a place where interest is piqued and questions answered, but not where any sort of deal or commitment are made. Whether the law considers "selling" the closing of deals or the promotion of the car (with the intent for sale through another medium - Tesla's web site) will be for the judge to interpret. As an aside, I find it interesting that people with pro- and anti-Tesla leanings seem to be arguing about what constitutes "selling" a car from opposite sides, now. It seems like just a few weeks ago that some folks were adamant the car's not sold until it's actually delivered to the customer, not just built, and now "selling" is just talking about the car enthusiastically. Setting aside the manufacturer's conflict of interest, I'm worried that by this definition *I* might need a dealer's license should I talk-up the car in Boston, MA.
          Nick Kordich
          • 5 Months Ago
          @Letstakeawalk
          Hypothetically, would a multi-brand gallery store be a dealership? It's easy to see a Tesla store fulfilling the role of a conventional single-brand dealer franchise, but getting down to what constitutes a dealer, what about other businesses? Let's say I have an automobile memorabilia store with excess floor space so I bring in static models, like a Model T and a Ford Fusion Energi. For me, it draws in customers, but would the business be a dealership by the company rep's presence, and would the Ford representative or I need a dealer's license to promote the car? If the 'out' that Tesla is counting on is that it's not a dealership because they're not making deals, and that's not valid, there's a question of what constitutes selling cars. You can sell cars without making a commission on them, though that's common among dealerships, so what makes someone a dealer if they don't close deals vs. someone who's simply is advertising? Are manufacturers already in violation for advertising not done in conjunction with a dealership?
          Letstakeawalk
          • 5 Months Ago
          @Letstakeawalk
          Sorry, wrong quote. The above are the requirements to be granted a Dealership license, but this is the legal definition of "Dealer": "“Dealer”, “motor vehicle dealer” or “dealership”, any person who, in the ordinary course of its business, is engaged in the business of selling new motor vehicles to consumers or other end users pursuant to a franchise agreement and who has obtained a class 1 license pursuant to the provisions of section 58 and 59 of chapter 140. It shall not include: (1) receivers, trustees, administrators, executors, guardians, or other persons appointed by or acting under judgment, decree or order of any court, or (2) public officers while performing their duties as such officers. " http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93B/Section1
        Rotation
        • 5 Months Ago
        @Grendal
        The law goes beyond just unfair competition. It explicitly says a manufacturer cannot own or operate a dealership. How do you see that Tesla's stores are not dealerships? I do find it odd the document has a definitions section but fails to define a dealership!
        purrpullberra
        • 5 Months Ago
        @Grendal
        Yep. That's exactly what I've been saying all along. These complainers are claiming that 3 laws are being violated but none of them account for a car manufacturer that hasn't sold and licenses to dealerships. They claim 'you break this part of this law' then 'you also break this part of the other law' but they never show how this exact store breaks any one law. It's too piecemeal an approach for a reasonable judge to find in their favor. No selling happens there. No negotiating happens there. No Tesla dealerships exist. No case at all. Goodbye Dinosaurs. And my 'hatred' of dealerships (I only hate the bad ones) has nothing to do with these obvious facts. I had to reply before reading the 3 other comments to see if I came close to knowing what they say. Here goes....
        Marco Polo
        • 5 Months Ago
        @Grendal
        @Grendal Tesla clearly intends to challenge the existing law. The law(s) were originally passed to prevent auto-manufacturers dominating the auto-retail sector, forming cartels and practicing price collusion. Tesla fans claim that the law somehow protects the ' vested interest of OEM's' are illogical ! The law exists to protect consumers and encourage competition at a retail level, in an era when about 85% of cars sold in the US were made by 3 US auto-manufacturers. I imagine the Judge refused the preliminary injunction, simply because the plaintiff's petition failed the test required for an injunctive relief . A petition for injunctive relief must contain grounds of urgency that can't be redressed by other means. In this case, the petition relied on issues which could only be decided by trial, and lacked the level urgency required for an injunction. Clearly, Tesla will be arguing that the original legislators could not have foreseen the growth of the internet, nor the growth of foreign competition in the American automobile market place. Tesla may argue it's products are more akin to computers than Auto-mobiles, and all future cars sales will be driven by internet sales, not dealerships. Tesla may claim the traditional dealer belongs to a past era. Tesla may also argue that the two business models should be allowed to co-exist to see which survives. The dealers may respond by claiming the law was passed to encourage competition, prevent cartels, and protect the existing dealership model which provides for local control and responsible licencing of Auto retailing. Competition from manufacturer owned dealers would disadvantage multi-franchises and lead to bullying and price fixing. The dealers would refute any claim that Tesla is not a traditional auto-manufacturer, and argue that allowing Tesla exemption would allow GM, or Toyota the same exemption. The dealers would also claim that even if a fine distinction between Tesla shops an dealerships exist's, at present, who's to say that will continue in the future ? Difficult issues for an unbiased Judge to decide. Tesla fans will cry 'unfair' if the law is enforced. Elon Musk is to be admired for his many achievements, but he displays a regrettable contempt for any law he finds inconvenient. At the moment his fans may cheer, but respect for the law, can't be sacrificed because of support for Tesla as an EV. As Rotation quite rightly points out, what if GM, Ford or Toyota decided to defy the law ? The law must be the same for everyone. But, courts are not the place for this issue to be decided. The legislature has an obligation to update or repeal laws that have fallen behind social developments. Personally, I hope that some accommodation for Tesla's business retail sales model can be made within the law. I'm curious to see if Tesla's concept would really work, or whether in the long run, the advantages of the older dealer network would prevail,
          marcopolo
          • 5 Months Ago
          @Marco Polo
          @ Grendal The matter has not gone to trial. The Judge has simply refused a preliminary injunction, solely because the grounds for inductive relief were not sufficiently compelling. This has nothing to do with the merits of the future case. Nor is the issue of being or small relevant. The law doesn't have any provision for discretion to allow people who are considered 'nice' to break the law, a little bit ! Nor does it have anything to do with technology. Tesla's enlargement that it's stores are simply information booths, like those at car shows, is clearly a subterfuge. Tesla's best hope is the argument that the legislation couldn't have foreseen the growth of the internet, and therefore the premise of the law is no longer operational. Rotations point remains valid, if Tesla can do it, why Can't Toyota, GM, etc..... Interesting.....
          Grendal
          • 5 Months Ago
          @Marco Polo
          @ Marco I get where you are coming from. In this case, because every states laws will be phrased differently, you are reading way too much into it. You are interpreting the larger picture and this judge is simply looking at the law as written as making a decision based on it. I read the law, in a cursory way, and I am not a lawyer, but I stand by my quick summary that you responded to. Eventually Tesla could become disruptive to the overall sales of cars by their different business model. But currently they are a small fish in a big pond. The judge recognizes, by the wording of his ruling, that they are being bullied by those bringing suit and responded accordingly. Again. I don't see how this will affect current dealerships. The law is clear about that. The laws still protects dealerships from unfair business practices from major car manufacturers. The only way that Tesla can be ruled against from what I read is if the judge decides that the Tesla store is considered a dealership. I don't think he will from the way he phrased his ruling on the injunction. Tesla ex-counsel thought similarly. Rotation went to a store and felt that he was being sold to. I visited the Denver Colorado store and never felt the two people there were trying to talk me into buying a car. It might be that, because of different state laws that the workers are allowed to "sell" in certain stores. In the larger picture you are trying to say that Tesla needs to follow the law and I certainly don't disagree with that. I am not one that believes that Tesla is above the law. "Elon Musk is to be admired for his many achievements, but he displays a regrettable contempt for any law he finds inconvenient." Contempt might be too harsh a word. I think he is always trying to streamline and simplify a process.
          Grendal
          • 5 Months Ago
          @Marco Polo
          GM and Toyota can't do it because the Massachusetts law says that they can't. They are manufacturers with existing independent dealerships. The law, as written, protects those dealerships from GM or Toyota from doing an end run and selling directly to the public. Nor could GM or Toyota close all their dealerships and then open a Tesla-style store. That was exactly what the laws were written to prevent. Tesla is a manufacturer with no independent dealerships promoting their internet product to the general public in a public environment (the mall). Those are two completely different business models selling a similar (but different) product. I agree it will be a difficult issue for a judge to decide. I disagree that it's subterfuge on the part of Tesla that their store is more than an information booth. That's for a judge to decide based on evidence. There is a big difference between promotion and active selling. I promote Tesla in my comments but I have never tried to actively sell one here or anywhere. Rotation seems to think one of the people at a store tried to sell him but I don't know which location and it might have been allowed where he was. I experienced promotion, not sales, in Denver Colorado. I was actively sold a polo shirt which I bought. NADA may win in other states but I think that they will lose in Massachusetts. We shall see. If the people working in the Massachusetts store are doing what Rotation described and NADA has evidence of it then I'd say that Tesla would and should lose. If they are just promoting the products without actively selling then I think Tesla will win. I will leave it to the judge to decide. I really don't care about the stores personally. I will buy a Tesla, if they survive, a few years from now whether there are stores or not. I like the stores because they teach the uninformed general public about EV's and their capabilities which I consider a very good thing. But the information is getting out there slowly anyway even if the stores close.
      purrpullberra
      • 2 Years Ago
      If the laws don't specifically describe EXACTLY what Tesla do in their stores (not what Rotation 'claims' happened) then the law doesn't apply. The laws get REALLY specific on somethings so when something isn't mentioned that means its not part of the law. Tesla stores do not do what Rotation claims happened. MAYBE a rouge employee was aggressive but its impossible to be pressured in the way claimed. I still can't see where the laws stop pertaining to the manufacturer/franchise relationship and branch out to manufacturers with no dealerships. It is always such a stretch for Marco or rotation to say ANY MANUFACTURER but the law follows with 'granted a dealership'. The law always continues past where these guys cite the law in quotes. But it just keeps coming down to "I feel like those Tesla stores are doing what I call being a dealership so they are just criminals and fools.". Just from one claim that one guy pressured him to sit at a computer and somehow send 5k through the stores' PC. Even if I believed the story, which I am certain is made up, it just sounds like one guy did something wrong not Tesla. But what deals happen at dealerships and what happens at Tesla stores? I've made a very thorough list already but just answer this. If you went to a store to buy a product but they wouldn't/couldn't sell it to you would you think you'd bought something? If they said you must go home and buy it there then THEY AREN'T SELLING ANYTHING.
      carney373
      • 2 Years Ago
      Why do we have this stupid law in the first place? Scrap it immediately!
      Levine Levine
      • 2 Years Ago
      NADA is a group of thugs rip-ing off consumers. Nobody should dictate to any manufacture the sale and distribution of a consumer product must be through a middlemen.
      Rotation
      • 5 Months Ago
      I don't agree. http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93B/Section4 (c) It shall be deemed a violation of subsection (a) of section 3 for a manufacturer, distributor or franchisor representative: (10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer or distributor. That doesn't say anything about competing with franchisees. It says it's illegal for a manufacturer to own or operate a dealership in Mass. selling the same line make as any of the vehicles it manufactures.
      Letstakeawalk
      • 5 Months Ago
      Rotation has quoted the applicable section of law. It's not about Tesla competing with a franchisee, it's about an automaker not being allowed to own a dealership period.
    • Load More Comments