Report

Virginia dealer group accuses Tesla of breaking sales law

Company denies wrongdoing as feud continues.

2016 Tesla Model X front 3/4 view
  • Image Credit: Sebastian Blanco
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X rear 3/4 view
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X front 3/4 view
  • 2016 Tesla Model X side view
  • 2016 Tesla Model X side view
  • 2016 Tesla Model X front view
  • 2016 Tesla Model X rear view
  • 2016 Tesla Model X headlight
  • 2016 Tesla Model X logo
  • 2016 Tesla Model X wheel detail
  • 2016 Tesla Model X badge
  • 2016 Tesla Model X side mirror
  • 2016 Tesla Model X badge
  • 2016 Tesla Model X badge
  • 2016 Tesla Model X badge
  • 2016 Tesla Model X interior
  • 2016 Tesla Model X instrument cluster
  • 2016 Tesla Model X infotainment system
  • 2016 Tesla Model X infotainment system
  • 2016 Tesla Model X navigation system
  • 2016 Tesla Model X dash
  • 2016 Tesla Model X cup holders
  • 2016 Tesla Model X rear seats
  • 2016 Tesla Model X interior
  • 2016 Tesla Model X rear cargo area
  • 2016 Tesla Model X frunk
  • 2016 Tesla Model X graphics
Tesla Motors is being accused by the Virginia Automobile Dealers Association (VADA) of running unlicensed operations out of a shopping mall and improper advertising, among other alleged law violations. Tesla says it has done nothing wrong and accused the dealer group of trying to thwart sales of its electric vehicles, according to Hybrid Cars. It's just the latest example of how divisive the issue of direct sales from companies to consumers is in states like Virginia.

VADA is asking the state to look into what it says are illegal and unlicensed operations out of a shopping mall near the automaker's only store in the state in Tysons Corner, near Washington, DC. In addition to those operations, VADA says Tesla is practicing improper advertising and vehicle-processing-fee violations. Tesla spokeswoman Khobi Brooklyn said the group was merely "being able to buy cars from Tesla" and accused it of "outright harassment," according to Hybrid Cars.

The bigger issue, though, may be Tesla's attempt to open up a second store in the state. Tesla opened the Tylsons Corner store early last year, and has been trying to open up a second store since then. VADA has said Tesla doesn't have the legal right to open a second store until at least 2017, and as a result, VADA sued Tesla in March.

The testiness between Tesla and the state of Virginia heated up last August when the state took issue with Tesla's referral program that gave both a referring Tesla owner and the new-car buyer $1,000 credits. Because that program was interpreted as paying people who weren't licensed to sell vehicles, a situation known as "bird-dogging," Tesla had to tweak the program so that only the new-car buyer received any financial bonus.

Related Video:

Biggest Takeaways From Tesla's Candid 2016 Shareholder Meeting | Autoblog Minute

Share This Photo X