North Carolina denied Tesla Motors’ bid to attain a second dealership license in the state, saying the automaker must go through a third-party dealership group.
The North Carolina Division of Motor Vehicles ruled Friday that Tesla did not meet the requirements to become exempt from state law prohibiting manufacturers from owning dealerships.
Tesla had hoped to open a second North Carolina dealership location at its existing gallery and service center in Matthews, N.C., a suburb of Charlotte. The company has one dealership in the state, in Raleigh.
The ruling is the latest in a long series of battles Tesla has waged with dealership groups and state lawmakers on the legality of its direct-sales model. Tesla owns and operates its own dealerships, which the automaker says allows it to more effectively retail its vehicles. Opponents of the direct-sales model have said it hurts consumers.
The electric automaker argued this month that the Matthews location should be exempt from the state’s ban on manufacturer-owned dealerships, according to a DMV order. The state instead sided with four dealership groups in opposing issuing the license. Hendrick Automotive Group and Sonic Automotive Inc. were two of the opponents.
The North Carolina DMV, in an order signed by Administrative Hearing Officer Larry Greene, said there are “at least three independent dealers” in the market that would be able to own and operate a Tesla dealership “in a manner consistent with the public interest,” meaning the exemption would not apply.
Requests for comment from Tesla spokeswoman Khobi Brooklyn and Shawn Mercer, the attorney who represented the dealership groups, were not immediately returned.
