Georgia Becomes Latest Battleground in Tesla vs Autodealer Fight

It might be one of the fastest growing markets for electric cars in the U.S., but Georgia has become the latest battleground in a seemingly endless fight between powerful auto dealer associations and Californian automaker Tesla Motors.

While the specifics of this particular battle are subtly different to previous encounters, the ulterior motive is the same: to stop Tesla from selling its luxury plug-in cars direct to customers.

Tesla Motors is under attack form auto dealer associations again, this time in Georgia.

Tesla Motors is under attack form auto dealer associations again, this time in Georgia.

Unlike most automakers, Tesla sells its cars directly to customers online, with its mall-based Tesla Stores and dedicated service centres replacing traditional franchised auto dealerships. In addition to being able to control the consistency of owners’ experiences from start to finish, Tesla feels its sales model is far more consumer-oriented, modern and equitable than traditional franchised auto dealership models.

Auto dealers argue that the same model prevents competition and is unfair to the rest of the auto industry.

In this particular case, the Georgia auto dealers’ association claims Tesla improperly obtained auto dealer licenses by claiming that it qualified for a statutory exemption intended for custom automakers. As a consequence, it has petitioned state regulators asking them to ban Tesla from selling any more cars direct to customers within the state, revoke its license forthwith, and prohibit it from ever selling in the state again.

If approved, this would not only affect Tesla’s existing Marietta Store in Atlanta, but also two more stores in the greater Atlanta area.

Auto dealer associations in Georgia claim Tesla's auto dealer licenses were incorrectly obtained

Auto dealer associations in Georgia claim Tesla’s auto dealer licenses were improprely obtained

The Georgia auto dealers’ association says the statutory exemption under question is one which allows direct sales of custom vehicles, provided the company in question does not sell more than 150 vehicles per year. It argues that Tesla cannot comply with this exemption due to the fact that its cars are not to custom design specifications and it is already selling in excess of 150 vehicles per year.

Tesla has yet to comment publicly on this latest challenge to its sales model, although if past examples are to go by, it is already readying its legal team and rallying advocates around to fight the petition up to and including the courts if necessary.

Also in Tesla’s favour is the defeat of a prior attempt by Republicans to end Georgia’s generous $5,000 zero emission vehicle tax credit earlier this year, which ran out of time before it could be voted upon in the Georgian Senate.

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