Tesla has found a workaround to start leasing cars out of its showroom in Connecticut, where car dealers and politicians have been blocking Tesla’s attempts to legally sell cars.
The Connecticut Automotive Retailers Association (CARA) has been lobbying to retain its monopoly on vehicle sales in the state by using old laws that prohibit automakers from selling vehicles to consumers without going through franchise dealerships.
Those laws exist to protect dealerships against potential unfair competition against their own automakers, but they are trying to apply them to automakers who have never had franchise dealerships, like Tesla.
They have been leading several efforts to block Tesla’s attempt to obtain an exemption to sell its vehicles all the way back to 2014.
Car dealers have a lot of influence on state politicians and so far, they have managed to shut down three different efforts from Tesla to change the law in Connecticut.
In the few states where Tesla is not officially allowed to sell direct to consumers at retail locations, the automaker has still opened ‘galleries’ where Tesla employees can explain the company’s products to the public, but they can’t discuss sales.
In Connecticut, the auto dealer association managed to have Tesla’s ‘Gallery’ shut down through an effort that involved sending ‘secret shoppers’ to try to make Tesla staff talk about sales and shut down the gallery.
While Tesla is still not allowed to sell cars in Connecticut, it actually found a workaround to start leasing cars out of its showroom in the state.
In a communication to its local owner’s club, Tesla said:
“We are excited to announce that we are now able to offer leases to Connecticut residents from our Milford location. Visitors can now speak with a Milford Gallery Advisor about electric vehicle technology and experience a demonstration drive if they are considering leasing a Tesla. This is an exciting step toward increasing the number of electric vehicles in Connecticut, and Tesla thanks you for all your support along the way.”
The automaker explains how the “Tesla leasing location” is now allowed in the state:
“A Tesla leasing location can offer leases but cannot conduct any activity related to the sale of a motor vehicle. Because it is a manufacturer, Tesla is not eligible to apply for a dealer license under state law, but Tesla is eligible to hold a leasing license, and thus is authorized to offer leases in Connecticut.”
Tesla says that its renewable energy products are also available at the location.
Well played Tesla!
Oh, I can’t wait to see the reaction from the car dealer association.
The bigger deal here is that Tesla is now going to be able to offer test rides out of its Connecticut location as long as the customers say they are interested in leasing.
Now if after the test drive, they change their minds in decide to buy the car through Tesla’s website, it wouldn’t be illegal.
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