Tesla has agreed to withdraw the lawsuit it filed after the Virginia Department of Motor Vehicles rejected Tesla’s bid for a dealership license for its store in the Washington, DC, suburb of Tyson’s Corner, VA.
Now, after much deliberation between the company, state officials, and dealer representatives, the parties have decided to approve Tesla’s request to operate a dealership in Virginia.
Sunni Brown, public relations and media liaison of the Virginia DMV, offered the following statement to Auto Remarketing:
“Tesla, the Virginia Automobile Dealers Association, and the Department of Motor Vehicles, through counsel, came to an agreement and avoided litigation regarding the operation of a Tesla dealership in Virginia. After the initial ruling, the parties to the hearing engaged in discussions and, after consideration of those discussions and additional information presented, the Commissioner can determine that Tesla may own a Tesla dealership in Northern Virginia.”
The automaker now needs to get approval from the Virginia Motor Vehicle Dealer Board, the state regulatory agency that oversees dealers in the state, before it can begin selling vehicles in Virginia.
Hall couldn’t comment on the details of the deal because the agreement was made under a court seal, he said.
“It’s a matter of lots of compromise on everybody’s part,” Hall said. “Nobody is getting exactly what they want.”
The electric vehicle maker wants to eschew franchised dealerships and sell its cars directly to consumers, but dealer franchise laws in many states prohibit or limit factory sales.
As Tesla has grown its network of retail stores, a number of states have moved to tighten those restrictions on direct sales.
Virginia DMV Commissioner Richard Holcomb had rejected Tesla’s request to open its own store in April. State law allows factory-owned stores if no independent dealer is available to operate the store, but Holcomb said there wasn’t clear evidence that the exception was applicable.
The Virginia Motor Vehicle Dealer Board has yet to receive Tesla’s application, Bruce Gould, the board’s executive director, said. Gould said it typically takes a new dealership about two weeks to get approval.
“They’ve rented a location, they’re paying rent, they want to get rolling and we want to get them rolling,” Gould said of the board’s regulation process.
A Tesla spokeswoman confirmed that the company had reached an agreement with the Virginia dealers’ group and state Department of Motor Vehicles. She said Tesla plans to apply for a license to open a store in northern Virginia, but declined to say when it would do so.
“We are encouraged by the settlement and look forward to seeking a license to open a store and an associated service facility in Northern Virginia,” said a spokesman for the automaker.