Tesla (TSLA) are New York Gov. Andrew Cuomo reached a deal on Friday that will allow the electric car company keep its existing five direct-sale stores — provided no additional stores are opened.
The deal comes weeks after New Jersey ousted TSLA from having company-owned stores in the state, and on the heels of several other states pushing bans that ensure car dealerships get a cut of any profit.
Several states besides New Jersey have bans or restrictions on direct sales, including Texas, Colorado, Ohio, Maryland, Minnesota and Virginia.
Last week, Tesla was allowed in Ohio to keep two of its existing sale-stores and one planned store, but similarly would be prevented from opening any new ones afterward.
According to the Wall Street Journal, the Ohio deal “requires approval from that state’s legislature, as does New York’s. But New York’s agreement has the support of legislative leaders and the governor, meaning its approval by the legislature is all but ensured.”
Diarmuid O’Connell, Tesla’s vice president of business development, called the deal a “constructive solution.” The agreement, Mr. O’Connell said, “protects franchise dealers’ existing business while allowing Tesla to continue to pursue its mission of catalyzing the market for sustainable transportation.”
Tesla’s direct-to-customer sales strategy has alarmed car dealerships, which fear not only the loss of potential revenue from Tesla, but that the simple and streamlined sales solution would be a hit with consumers.
Check out this Consumer Reports video on the difference between a direct sales store and sales at a car dealership.
