Tesla Motors has achieved yet another major victory in its fight to sell directly to customers — the Virginia Department of Motor Vehicles (DMV) has given Tesla the go-ahead to apply for a dealership license in Virginia, after holding talks with the DMV and the Virginia Automobile Dealers Association.
Previous to this somewhat surprising decision, Tesla had been denied the ability to operate its own dealership in the state. The turnaround appears to have been the result of various concessions offered by Tesla.
The next step for Tesla is now to obtain a license from the Virginia Motor Vehicles Dealer Board — Virginia’s auto dealer regulatory agency. While there are still further steps to be taken, the recent decision by the DMV represents a huge victory for Tesla. Breaking into a highly regulated market, where cars can only be sold through authorized dealers, is a big deal.
ValueWalk provides more information on the recent decision, and some background context:
Opening a retail store in Virginia will be a huge plus for Tesla Motors. This store will benefit the car maker as it will be near the country’s capital, where potential customers reside. Tesla Motors is a manufacturer of high end vehicles which are designed and manufactured for a premium class of customers, and thus having a retail store near Washington, DC, will be a perfect place for Tesla.
Elon Musk, the chairman and CEO of Tesla Motors, has been advocating a different sales model for cars for a while now. He believes that this sales model is apt for electric cars as the dealers are not interested in selling such vehicles, which require more effort to explain the benefits to customers. Musk has, therefore, adopted a model of ownership stores where people who understand the electric vehicle are employed so that they can impart information to customers.
The issue with this is, of course, that selling direct to customers is prohibited in most states — a prohibition which is considered out-dated by almost everyone, except auto dealers. Tesla has recently had a number of notable victories in that regard, though. For example, see:
- Tesla Motors Conquers North Carolina
- Tesla Still Allowed To Sell Its Own Vehicles In New York
- Auto Dealers Say Tesla Opening Stores In Minnesota Is “Not Fair”