December 1, 2016 - By Ruchi Gupta · 0 Comments
A second Tesla Motors Inc(NASDAQ:TSLA) Virginia retail store has been given the green light to open its door to customers after the pioneer of electric cars successfully overturned a ruling issued in September barring the same. In overturning the previous order, the Department of Motor Vehicles Commissioner cited the company’s unique sales and service requirements as the main cause.
While the greenlight is a big relief for Tesla, the state’s auto dealers could still contest the new order having vehemently objected the EV giant being given licenses to sale cars in the state. The automaker also has to get consent from the state’s Motor Vehicle dealer board to open the store even though early indication is that the board will not have any objections.
Car dealers across the across the country have always seen Tesla as a direct threat to their franchise system, which they say goes a long way in protecting the interest of the end consumer as well as their own. However, given that no independent auto dealer was willing to sell Tesla cars in Virginia Commissioner Richard D. Holcomb says they had no choice but to overturn the previous ruling.
Dealers in Virginia have been reluctant to sell Tesla cars on the fact that the company’s sales model makes it impossible for them to make money. The quality of service needed when dealing with such high-end electric cars is another thing that has made it impossible for the dealers to carry the cars.
“Tesla applauds the Commissioner’s decision to allow us to open our new store and service center in Richmond, Virginia. This decision will allow Richmond-area consumers to learn about and purchase their Tesla vehicles in closer proximity to their home,” Tesla in an email statement
Construction for Tesla’s Virginia second retail store should begin shortly as the EV giant moves to bolster its sales channel. The automaker is aggressively fighting to be allowed to open and run dealerships for its vehicles across the US in what has come to be seen as a state-by-state battle.
Tesla stock closed at $189.40, after declining $0.17 or 0.09% on Wednesday.
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By Ruchi Gupta