Tesla Direct Sales Lawsuit Thrown Out in Louisiana


A federal court on June 16 dismissed Tesla's lawsuit against the State of Louisiana, aimed at enabling direct sales of vehicles.

Tesla has operated with a direct-to-consumer sales model, which fixes prices on vehicles unless the automaker adjusts them. It eliminates the process of bargaining with salespeople at dealerships and gives every buyer the same price, getting rid of what most consumers say is one of the most stressful parts of car buying.

In numerous states, Tesla is allowed to operate this model. Legacy automakers have fought against the company’s ability to do so because they have argued it harms consumers by limiting competition.

Tesla sued Louisiana last year as its Motor Vehicle Commission was attempting to stop Tesla from providing warranty repairs at the New Orleans Service Center. The automaker argued the limitations against direct sales models “effectively shut out of Louisiana the consumer-centric, free-market solution that is a more efficient, consumer-friendly business model for today’s automotive consumer.”

Tesla was hoping to overturn the state’s decision that refused to allow it to sell vehicles directly to customers. On June 16, a federal court threw out Tesla’s complaint.

The ruling, seen by Reuters, said, “The direct sales ban applies equally to all manufacturers, and Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisiana Legislature.”

Direct sales bans would affect any company that uses the model to sell vehicles, and most of them are EV makers.

We thank Teslarati for reprint permission.

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