Tesla Fires Back At Georgia Dealers Association

We have an update to a story that we brought you previously. In late August, the Georgia Automobile Dealers Association (GADA) filed a petition with the State Department of Revenue claiming that the direct-to-consumer sales model employed by Tesla violated Georgia law. Fast-forward three months, and Tesla Motors is fighting back. The headline-grabbing electric car company founded by Elon Musk is petitioning for the legal right to sell their vehicles in the Peach State. As the GADA filed a petition against Tesla Motors, Tesla has filed a motion to dismiss. DrivingSales News has obtained a copy of that motion.

The motion, filed before Deputy Chief Judge Michael Malihi, asserts that Tesla shouldn’t be considered a party to the Georgia Motor Vehicle Franchise Practices Act. In its motion Tesla contends, “Nothing in the Act implicates a company like Tesla, which has never used franchised dealers, is not a party to any franchise relationship, and therefore has no franchisees against which it could unfairly compete.”

This motion is in response to the petition brought against Tesla at the end of August. That petition asserts that Tesla currently holds a dealer license though the Department of Revenue in Georgia. It further outlines the specifications available under state law for manufactures to sell new cars. According to the GMVFPA, vehicle manufacturers can sell vehicles if (a) the vehicle sold is “manufactured or assembled in accordance with custom design specifications of the customer” and (b) the manufacturer sells less than 150 of those vehicles per year. It’s claimed that Tesla sold 173 vehicles during one year, to which Tesla says they are not a party to the law and that the time period, which constitutes a manufacturing year, is different from what the GADA used in their calculation.

As has been the case in recent high-profile legal battles in New Jersey and Michigan, the showdown between dealer groups and Tesla has been a lightning rod for media coverage. The petition against tesla on behalf of the GADA was posted in its entirety on Reddit. As has been the case previously, very few of the individuals posting comments are siding with the dealer group. Many feel that the GADA is afraid of competition and wants to legislate against a true free market. While those thoughts are nothing more than opinions, what are dealer groups going to do to have a chance in this PR battle? What are dealers doing to simultaneously defend laws and defend their brand against accusations of being part of a “good ole boy” network? Will this debate end anytime soon? Do you think that the federal government, which provided Tesla with a $465 million dollar loan, might pass sweeping legislation on their behalf?