Tesla Motors, the electric car company founded and run by CEO Elon Musk (also founder of SpaceX and chairman of Solar City), was sued by members of the Automotive Trade Association representing dealerships in New York and Massachusetts over Tesla’s new retail model of selling through special Tesla-owned showrooms, which dealers claim violate state laws prohibiting factory ownership of dealerships, Automotive News reported Monday.
Elon Musk hit back with a blog post on the Tesla Motors website Monday, writing in part:
Automotive franchise laws were put in place decades ago to prevent a manufacturer from unfairly opening stores in direct competition with an existing franchise dealer that had already invested time, money and effort to open and promote their business. That would, of course, be wrong, but Tesla does not have this issue. We have granted no franchises anywhere in the world that will be harmed by us opening stores.
Regrettably, two lawsuits have nonetheless been filed against Tesla that we believe are starkly contrary to the spirit and the letter of the law. This is supported by the nature of the plaintiffs, where one is a Fisker dealer and the other is an auto group that has repeatedly demanded that it be granted a Tesla franchise. They will have considerable difficulty explaining to the court why Tesla opening a store in Boston is somehow contrary to the best interests of fair commerce or the public.
It is further worth noting that these franchise laws do not even exist in the rest of the world, where almost three quarters of premium sedan sales take place.
Fisker, another electric car company, has been sued by Tesla before over alleged theft of trade secrets. Read Musk’s full blog post here.
