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Virginia DMV Denies Tesla Request to Run Its Own Dealership

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

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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.

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