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Dealership Association Challenges Tesla's Move into Virginia

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June 27, 2017—A judge has ruled that the Virginia Automobile Dealers Association has legal standing to challenge a Virginia Department of Motor Vehicles decision allowing electric car maker Tesla Motors Inc. to open a company-owned dealership in the Richmond region, according to the Richmond Times-Dispatch.

After an hourlong hearing on Monday, Richmond Circuit Court Judge Gregory L. Rupe ruled that the dealers association is indeed an “aggrieved party” that can legally appeal to the circuit court to challenge a decision made in December by Virginia DMV Commissioner Richard D. Holcomb to grant Tesla’s application for a new dealership.

Tesla is already outfitting a store in western Henrico County. The company plans to open the store, located in a former furniture store, this summer, a spokesman said.

Rupe’s ruling does not affect whether the store can open, but it does allow the dealer group’s challenge to proceed to further court hearings.

During the hearing, lawyers for Tesla and the Virginia Attorney General’s office argued that the dealers association lacked legal standing to appeal Holcomb’s decision because the trade group is not in the auto business itself and has no direct financial interest in the case. Rupe denied motions by Tesla and the DMV to dismiss the dealers association’s appeal on that basis.

The dealers association, which represents independent, franchise dealerships in the state, opposed the company’s application during a DMV administrative hearing last year. The dealers group argues that Tesla should be required to sell its cars through independent dealerships, as other automobile manufacturers do, under a state law that prohibits manufacturers from owning dealerships in most circumstances.

 

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