VADA is claiming that the terms reached in a 2013 settlement in Tesla dictated that the company wasn't allowed to open its second store in the state until at least 2017. Tesla opened its only Virginia store in Tysons Corner near Washington, DC, early last year. According to Reuters, Tesla will defend itself "vigorously" (as if there's any other way to mount a legal defense).
Tesla will defend itself "vigorously."
"VADA's lawsuit, which seeks to stop Tesla from even going through the application process, is entirely without merit," the company said in an statement emailed to AutoblogGreen. "Tesla has always complied with the terms of the parties' Settlement Agreement. That agreement paved the way for Tesla's current store in Tysons Corner, and does not contain any prohibition against Tesla seeking to open a second store."
It's a practice Tesla has become accustomed to. The company has long battled various states and their entrenched automobile dealership associations over the legal right to open company-owned stores. Tesla says that its method is necessary because its electric cars are unconventional and can't be correctly marketed by a third-party dealership. Last August, Tesla had to modify its $2,000 peer-to-peer incentive program in Virginia.
Oddly, Tesla applied for a dealership license late last year in the car-making state of Michigan, which has long been steadfast against company-owned stores. While Tesla itself applied for the license, as opposed to a third party, it's unclear whether Tesla intends on attempting to get approval to operate the dealership itself or to deviate from its distribution method by handing over those reins to a third party.
Meanwhile, outside parties such as the Federal Trade Commission (FTC) have weighed in, saying that states like Michigan as well as New Jersey and Missouri are off-base by banning direct company-to-customer vehicle sales. Just don't tell that to the state of Virginia right now.
VADA was kind enough to post a statement about its lawsuit here, noting that "almost a dozen leading auto dealerships in Virginia have notified Tesla that they would gladly discuss selling Tesla vehicles as franchised dealerships." We're sure Elon Musk is pleased about that.