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May 2017

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Virginia auto dealers calls Motor Vehicle Dealer Board to investigate Tesla’s alleged illegal practices at its retail locations

Despite having two hearings during April, the dispute between Tesla Motors Inc (NASDAQ:TSLA) and Virginia Automobile Dealers Association (VADA) remains unsettled. While there is about a month for the third hearing, the state car dealers have already launched an assault on the young electric vehicle (EV) maker for allegedly violating state laws via its retail locations.

Automotive News reported late on Wednesday that VADA CEO Don Hall sent a 10-page letter to Virginia Motor Vehicle Dealer Board (MVDB), calling for a probe of the automaker’s practices at its licensed store in Tysons Corner and an unlicensed retail center at a nearly shopping mall.

Mr. Hall wrote in the letter, “VADA believes it has a duty to bring these repeated violations to the attention of the MVDB so that the MVDB may protect its credibility in the face of such reckless law-breaking.”

VADA accuses the company for, firstly, operations and test drives at the unlicensed dealership. Secondly, for failing to reveal filing fee, government fee, and taxes, for its online systems – violating fee processing. Lastly, it believes that Tesla is using improper advertising at its retail locations.

The VADA boss even told Automotive News via email that the MVDB, the government entity that regulates auto dealers, has “100% authority” to put an end to Tesla’s existence in Virginia.  

The evidence of the alleged infringements appeared during hearings of Department of Motors Vehicles (DMV) where the company requested for another dealership in Virginia. VADA strongly opposes that license request and sued Tesla, as well as the DMV in few months ago to ensure that the company doesn’t receive any more exemptions.

Tesla Head of Global Communications Khobi Brooklyn condemned VADA’s allegations, saying in an email statement:

“The franchised dealer lobby in Virginia is taking every possible step, whether through lawsuits, PR campaigns or outright harassment, to try to prevent Virginians from being able to buy cars from Tesla.”

Ms. Brooklyn believes that car dealers’ actions are “legally wrongful” and they threaten “to move Virginia backwards.” She concluded that the state should give Virginians the right to buy a Tesla car if they are willing and able to, and Tesla will continue to combat for the right.