Tesla, the American manufacturer of fully electric cars, wants to open up a second Virginia location here in Richmond, but auto dealers, specifically the Virginia Automobile



Tesla, the American manufacturer of fully electric cars, wants to open up a second Virginia location here in Richmond, but auto dealers, specifically the Virginia Automobile Dealers Association(VADA), are less thrilled with the idea.

Tesla currently has one dealership in Vienna, VA, as part of an agreement made back in 2013. That agreement allowed the one location to be built, and the possibility of a second location in 2017. There were additional stipulations about Tesla trying to find a local dealer to be a franchisee for their products, but for those familiar with Tesla, that is not how they operate.

Instead, Tesla cars can be purchased online or in stores. The physical locations are entirely maintained and operated by Tesla employees, not third party retailers, and the sales structure they use is uniform between online and instore. A lawyer for the auto manufacturer, John Gavin, said the company’s aim since it started 13 years ago was to be a kind of “revolution” in auto making and buying, and part of that meant changing the way customers interact with the product on site.

“Tesla knew we couldn’t survive with the old service and sales model… Tesla could not repeat the mistakes of the past…,” Gavin said during yesterday’s hearing. “Tesla has to be fully accountable for every car, every service, every sale… and no independent dealer can replicate that.”

That last bit about “no independent dealer” being able to “replicate that” level of service is part of the argument the VADA was using. The 2013 agreement, according to the lawyer for the VADA, asked Tesla use a local dealer “who can own and operate it consistently with the public interest.” They even brought some Dealership owners to the hearing to testify to their competency.

But according to Tesla, they haven’t found someone who could do what they do, at least to their standards. And again, they’re not in the business of compromising on this.

Virginia Law, however, is on the VADA’s side, and does not allow manufacturers to sell cars in the Commonwealth w/o a dealership. However, the DMV commissioner is allowed to give individual licenses, as was the case with Tesla’s first store, and this possible second location as well.

The public hearing was scheduled for Thursday AM, up at the tippy top of DMV head quarters. The room was semi-packed with those supporting Tesla, and representatives from Tesla themselves, who aimed to secure a RVA location.

The VADA opened the meeting expressing concerns about the process from step one where they argued Tesla had denied them access to documents in a discovery phase, as if this was a legal challenge, and not a public hearing.

The VADA is actually suing Tesla for their attempt to open the second location, though yesterday’s meeting was debatably the place for that law suit to play out. Either way, they were pretty clear they didn’t even want the hearing to happen, and by using legal tools and arguments, they all but achieved their final goal.

“It is not due process for them to come loaded with everything, refuse to turn it over in discovery, want to have a hearing with experts for which we don’t get material to be able to examine and cross examine because they decided it wasn’t relevant,” the VADA lawyer said. “That’s not due process. That’s not being fair.”

To make up for the lack of info, the VADA found themselves asking the most mundane questions imaginable, pouring through documents, attempts by local dealerships to contact Tesla in the hopes of acquiring a franchise, asking reps from Tesla if they had seen any of these requests in line with the deal which asked, but didn’t require, them to consider such a setup.

Even by public meeting standards it was brutal, but the VADA does have a point, even if they are fighting a new system like taxis fighting Uber, and we continue to see how that ended up.

Things got so tense about 2.5 hours into the meeting that members of the public began interrupting the VADA lawyer, accusing him of filibustering and robbing the public of their chance to speak on the issue – it was both hilarious and sadly accurate.

I left the meeting around noon, but a Tesla rep sent us an email saying the VADA was still questioning their witnesses at 3 PM and the DMV was going to start kicking people out around 5.

Sure enough, no resolution was met and a second hearing was scheduled April 25 at 9 a.m.

Perhaps, at that point, the public will actually get a chance to speak.