A 5-0 ruling by Utah’s Supreme Court has denied Tesla the requested right to sell its vehicles directly to consumers, according to recent reports.
The ruling means that if Tesla wants to sell its vehicles to consumers in the state, it will have to rely on independent dealerships that have no real incentive to sell Tesla’s offerings, or electric vehicles in general.
Of course, Utah residents can still order from Tesla online, or make a trip to one of the neighboring states that allow Tesla to sell directly to consumers.
“Monday’s 5-0 ruling against Tesla follows last year’s Supreme Court hearing wherein the Silicon Valley-based company contended that Utah law did not block car makers from selling directly to buyers. Rather, the law only blocked car makers from owning a dealership that’s set up as a franchise,” Teslarati reports.
“The latest ruling is a major setback for Tesla after the company had opened a $3 million showroom in Salt Lake City in 2015, and created a company subsidiary named ‘Tesla UT’ as a means to support any state law that required a dealer franchise to sell directly to consumers.”
This Salt Lake City store will still be the base of Tesla’s maintenance and service business in the region, but employees there won’t be allowed to discuss vehicle pricing or provide test drives. The store will no doubt prove useful for energy storage and solar roof product sales, though.
A spokesperson for the company commented on the Utah Supreme Court ruling: “The Utah ruling is disappointing for Tesla and all Utah consumers interested in consumer choice, free markets, and sustainable energy. We will pursue all options to ensure that Tesla can operate in Utah without restriction. In the meantime, we will continue to provide service and limited sales activities (through our used car license) at our location in South Salt Lake.”
So, it looks like the situation in Utah is unlikely to change anytime soon.
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