Please ensure Javascript is enabled for purposes of website accessibility

Virginia DMV Denies Tesla Request to Run Its Own Dealership

By Associated Press - Apr 23, 2013 at 4:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

State law requires manufacturers to sell cars through a dealer, unless the manufacturer can show that no dealer is available.

McLEAN, Va. (AP) -- Virginia officials have rejected a request from electric car maker Tesla Motors (TSLA 7.33%) to operate its own dealership at a Tysons Corner mall.

State law requires manufacturers to sell cars through a dealer, unless the manufacturer can show that no dealer is available.

Palo Alto, Calif.-based Tesla sought an exception, saying its unique model for selling cars would not be attractive to a traditional dealer. The showroom would be more of a "design studio" where customers would use touch screens to customize options. No inventory would be on hand, and customers would wait up to six months to receive their vehicle. There would not be a service department.

The Virginia Automobile Dealers Association objected to Tesla's request.

In a ruling Monday, Department of Motor Vehicles Commissioner Richard Holcomb said he was unable to say definitively that no dealer could meet Tesla's needs.

Holcomb ruled against Tesla even though a DMV hearing officer had twice recommended that Virginia grant the company's request -- first in September and again in February after hearing specific complaints from VADA.

Tesla has the opportunity to appeal Holcomb's ruling in state court or resubmit its request with evidence that no dealer is available to operate the franchise in a manner that would benefit the public interest.

Tesla is waging similar campaigns in other states.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$759.63 (7.33%) $51.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.