In April, the California manufacturer of the virtually noiseless car was denied the state Department of Motor Vehicles' permission to operate a dealership in Virginia due to a law that prohibits car manufacturers from also being dealers, the Norfolk Virginian-Pilot reported Sunday.
The DMV in Richmond has made 14 exceptions to the dealer law for manufacturers of specialty motorcycles, trucks and trailers.
Although a hearing officer twice recommended that Tesla be allowed to sell cars in Virginia because no other dealer is available to market the product, the ruling is now being appealed in Fairfax County Circuit Court.
In the event a deal between the state, the Virginia Automobile Dealers Association and Tesla can be worked out, litigation could be avoided, the Virginian-Pilot reported.
Don Hall, the president of the state auto dealers association, said his group wants the company to obey Virginia rules of the road for car buyers' own good. He said he is concerned about cars left in circulation without a service technician's network to maintain them.
"We are fighting a well-funded, well-established, politically connected organization looking out for its own monopolistic interests," said Tesla attorney James Chen, who doubts auto dealers' concern about consumer protection against a failing technicians'network.