Tesla Motors Inc (NASDAQ:TSLA) is now allowed to keep its dealerships in the state of New York. Owing to an agreement between Tesla and New York Gov. Andrew Cuomo, the company can retain its five direct-to-consumer retail stores provided it does not open any new store.
The agreement, according to Tesla and Gov. Cuomo, will be beneficial to the consumers, Tesla and the franchised dealerships.
Tesla could not open any new store in New York
According to a report from the Wall Street Journal, Tesla Motors Inc (NASDAQ:TSLA) will have to follow the rules under “strengthened dealer franchise law” for opening any new dealerships. After the agreement, the authorities that were making efforts to ban Tesla’s current and future retail stores will now terminate their efforts.
Earlier this week, the electronic automaker entered into a similar deal with Ohio. In the Ohio deal, the company is allowed to retain its two retail stores, and could open one more. Both the New York and Ohio deal require an approval from state’s legislature, but New York’s deal has the backing of legislative leaders and the governor.
Stiff opposition in many states
Tesla Motors Inc (NASDAQ:TSLA) Chief Executive Elon Musk is still in arms over its direct-to-consumer sales model with dealers, in many states. A few weeks back, New Jersey regulators passed a law that bans Tesla from selling its vehicles, and also the company will have to close its retail operations, including two stores, in the state. In Texas and Arizona, also, Tesla is banned from selling its car directly to the customers.
Tesla follows a model of directly selling its vehicles to the consumers instead of relying on the franchised dealerships. In many states, the direct selling model from the company has faced stiff opposition from associations representing the dealerships. In many states, Tesla is fully banned from selling its vehicles under the direct model. In New York, though the agreement does not allow opening of any store, the company can still sell the vehicles to the customers, and continue to make efforts to bend the law fully in its favor.
On Friday, Tesla Motors Inc (NASDAQ:TSLA) said that will add a titanium shielding and an aluminum deflector plate on the underbody of its Model S luxury electric car. The new additions will help prevent possible fires caused by running over objects.