Tesla showroom open:
Tesla is quietly selling cars from its Scottsdale Fashion Square store after prevailing in a years-long legal battle over its right to do business in Arizona. The California-based electric-car company endured a legal fight dating to 2012.
from unfairly competing against franchises selling its brands.
“The evidence in this matter establishes Tesla Motors has no dealers in this state with which to compete, and thus, the restrictions and exceptions described in (the law) are inapplicable,” Hale wrote.
Tesla officials declined to comment, but it’s likely they made little to no announcement about sales beginning in Scottsdale because of ongoing litigation at the time.
After Hale’s decision, the Arizona Automobile Dealers Association sued in Maricopa County Superior Court seeking to ban manufacturers from selling new cars. Tesla intervened, and Judge Joshua Rogers upheld Hale’s interpretation.
“The prohibitions of (state law) therefore have no application to manufacturers that do not have any of their own dealers,” Rogers wrote.
Tesla does not franchise dealerships like the major automakers because sales volume for the expensive cars is so low — most models sell for more than $100,000. They also worry that dealerships relying on volume sales of gas-engine cars would not properly promote the electric cars.
Today, about 1,700 Tesla vehicles are registered in Arizona, but most of them were purchased elsewhere.
For years, Tesla sold hats and T-shirts in the Scottsdale store, and employees talked with customers about the popular electric vehicles on display. But they could not discuss prices or sell cars. Customers could go online for more pricing information and order a car from California.
The Tempe Tesla showroom remains a service center and display area, without offering sales.
Tesla has about two dozen stores in the U.S., and has fought similar restrictions in some of the more prized large markets, such as Texas and Michigan.
After ADOT’s improper guidance, Tesla lobbyists unsuccessfully sought changes in state law in 2014, and in 2015, arguing Arizona was missing out on sales tax collections. The Alliance of Automobile Manufacturers and the dealers association opposed the change.
Meanwhile, Arizona lost its 2014 bid for a multibillion-dollar Tesla battery factory, which the company instead built in northern Nevada, east of Reno. Tesla was considering locations in Texas, New Mexico, Arizona and Nevada, and Nevada was the only state at the time allowing the company to sell cars through its direct-sale strategy.
Bobbi Sparrow, president of the Arizona Automobile Dealers Association, said Wednesday that Tesla should have to sell through dealers like other automakers.
“It is still a fact that we would like Tesla to sell vehicles through a dealership, and dealers have offered to be their dealer,” she said.