Judge dismisses Massachusetts auto dealers’ lawsuit against Tesla

The good news just keeps rolling in for Tesla. This week a Massachusetts Superior Court judge dismissed a lawsuit that the Massachusetts Automobile Dealers Association had filed against the company, based upon the auto dealers’ lack of standing and failure to state a claim.

Tesla plans to build its own network of stores, rather than using independent dealers as other US automakers do, the main reason being, as CEO Elon Musk put it, “franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars.”

Several groups representing auto dealers have cried foul, claiming that this violates franchise laws. In most states, it’s illegal for automakers to own dealerships, and Tesla’s claim that its stores won’t be dealerships, because cars won’t actually be sold on-site, is “an outright scam,” according to a spokesman for the Massachusetts association.

Apparently, the Massachusetts judge did not agree, but this isn’t the end of the matter. The Massachusetts association has filed a separate, related lawsuit, and a dealer group in New York also has a suit pending.

“We are delighted by the outright dismissal of this case and the validation that we are operating our business in compliance with the laws and expectations of the Commonwealth of Massachusetts,” said Elon Musk. “We are confident that other states will also come to this same conclusion and look forward to following through on our commitment to introduce consumers to electric vehicle technology in an open, friendly, no-pressure environment.”

 

Source: Tesla Motors