Tesla and New York dealers reach deal allowing 5 stores for the EV maker

Article by Christian A., on March 31, 2014

Tesla Motors Inc. and lobbying groups for New York auto dealers inked a deal that enables the EV maker to keep its five retail stores in the state, according to New York Gov. Andrew Cuomo. He said that the agreement reaffirms New York’s long-standing commitment to the dealer franchise system, while making sure that the state remains a leader in promoting innovative businesses and encouraging zero emissions vehicle sales.

Cuomo said in a statement that legislation will be initiated “in the near future” to implement the agreement. Mark Schienberg, president of the Greater New York Automobile Dealers Association, remarked that dealers approved the agreement partly to allow other provisions being sought in franchise legislation won’t be stalled by the Tesla dispute.

Schienberg said that while Tesla’s five stores in New York will be grandfathered in under the agreement, the carmaker cannot open more stores in the state. The agreement is expected to be adopted as early as next week and is aimed at thwarting other carmakers from opening their own stores.

The agreement is also aimed at tightening up the language prohibiting factory stores in New York’s statute, Schienberg told Automotive News, adding that the compromise works out well for dealers and consumers while opening up opportunities for Tesla. Schienberg remarked that he expects Tesla to eventually shift using the franchise system “if and when it starts selling in large volumes.“

In 2012, the Greater New York Automobile Dealers Association filed a lawsuit against Tesla and a state agency, claiming that the EV maker’s store licenses had been granted illegally. The lawsuit was dismissed in 2013 for lack of standing, with the association appealing the decision.

Topics: tesla, electric car

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