Tesla, founded by tech industry tycoon Elon Musk, has contended that no franchise dealers can profitably operate under its direct-to-consumer, fixed-price business model in a manner consistent with the public interest.
The Virginia Automobile Dealers Association, a trade group for independent dealers, had opposed Tesla’s previous attempts to open its own stores in the state, including one that opened at 9850 W. Broad St. in western Henrico in 2017.
The trade group did not formally oppose Tesla’s application for the latest planned stores, but two dealerships in the Charlottesville area did notify the DMV that they believed they could own and operate a Tesla franchise.
In his decision, Holcomb said evidence presented at a hearing in March indicated that the two dealerships in Charlottesville region would need to change Tesla’s business model in order to sell its cars profitably.
Holcomb also said “members of the public and public officials,” in the Charlottesville, Arlington and Norfolk areas have expressed support for the Tesla stores.
“Much of that support revolves around the fact that Tesla’s business model is unique and outside the traditional model of motor vehicle dealerships in Virginia,” Holcomb wrote in the decision.
If Tesla were precluded from opening the stores, “prospective and existing Tesla customers would need to travel great distances to the stores located in Fairfax or Richmond … or Raleigh, N.C.,” Holcomb wrote. “Traveling such distances is certainly not in the interest of the retail motor vehicle buyer.”