Tesla said the lawsuit filed by the Virginia Automobile Dealers Association is without merit and it will vigorously defend itself.
The electric car maker is facing a lawsuit filed last week by dealers in Virginia in order to stop Tesla’s plan to open a second store in the state. The company has already operated a store since 2015, find but plans to open a second one, store despite laws that do now allow a manufacturer to own an auto dealership. The Virginia Automobile Dealers Association claim that Tesla and the state’s Department of Motor Vehicles commissioner, nurse Richard D. Holcomb, are violating a 2013 agreement stating that Elon Musk’s company should not consider such a strategy until at least August 2017. Tesla says in a statement the lawsuit is “entirely without merit” and the agreement is not preventing the automaker from opening a second dealership.
“The agreement expressly states that it does not have any effect on any future application that Tesla may file and does not restrict Tesla from further petitioning the DMV for additional stores,” the company said. “Tesla and the DMV have complied with all laws in doing so. We will vigorously defend against VADA’s lawsuit and continue to fight for our customers and consumer freedom in Virginia.”
Tesla is not following the usual pattern – or the states laws – of selling its cars through franchised dealerships, thus starting a fight with the automakers and auto dealer groups.