Tesla's direct sales controversy has been put at ease by the highest Massachusetts court after the State Automobile Dealers Association of the state sued the electric car company for supposedly violating state law; however, the ruling said the lawsuit was actually intended to benefit car dealerships and not buyers.
Tesla's direct sales controversy comes after the Massachusetts State Automobile Dealers Association put a lawsuit two years ago, saying the luxury car company violated state laws by selling directly to buyers in their Natick store, without a proper license.
A lower court had already dismissed Tesla's direct sales controversy, saying that, since the company had not been franchised to retail, the legislation on dealerships didn't apply to it and didn't actually require the license. As Justice Barbara Lenk declared to the Boston Herald, the law is "is aimed primarily at protecting motor vehicle dealers from injury caused by the unfair business practices of manufacturers and distributors with which they are associated, generally in a franchise relationship."
This way, the Tesla direct sales controversy was settled as being non applicable, as the company has never been franchised and actually advocates towards their direct sales policy, inviting other companies to do the same. This policy has led the growing automobile company to face legal action in different states, most notably New Jersey, where the state's Motor Vehicle Commission revoked Tesla's license to operate its two stores in the state. For this, Tesla Motors has filed a lawsuit against the state of New Jersey, arguing that it should be allowed to operate freely in the existing system, which is quite similar to the Massachusetts one.
However, this might not be the end of the Tesla direct sales controversy. As the Wall Street Journal explains, the car company expects to introduce new legislation in the state of Georgia in 2015, to clarify its ability to sell there, as there are deep controls in the Southern state about car sales' limits, which can only reach 150 vehicles a year.
