Tesla Motors was denied a dealership license by the Virginia Department of Motor Vehicles on Monday. Tesla originally filed the request in March 2012.
The issue with Tesla’s request boils down to ownership of the dealership. Virginia law generally prohibits manufacturer-owned stores and promotes franchising. In order to open a store, Tesla would need to franchise its ownership.
Once exception to the law exists: If Tesla can prove there is no such independent dealer in Virginia, then the dealership may be run by the company itself. Virginia DMV Commissioner Richard Holcomb was not convinced Tesla was unable to find the proper ownership.
“We welcome Tesla to Virginia, but they too must abide by the laws like all the other manufacturers and Virginia new car and truck dealers,” said Don Hall, president of the dealers association in an e-mail statement to Automotive News on Tuesday.
This isn’t the nail in Tesla’s Virginia dealership coffin, however. Tesla can appeal the ruling if additional evidence is gathered concerning the lack of independent dealers. By appealing the decision through the court system, the issue could be tied up for months or possibly years, depending upon how Tesla plays their cards.
