Tesla Expands Showrooms on Tribal Lands to Bypass State Sales Restrictions


Tesla is intensifying its efforts to establish showrooms on tribal lands where it can sell directly to consumers, circumventing state laws that prohibit vehicle manufacturers from being retailers in favor of the dealership model.

This week, Mohegan Sun, a casino and entertainment complex in Connecticut owned by the federally recognized Mohegan Tribe, announced that the California-based electric automaker will open a showroom with a sales and delivery center on its sovereign property, where state law does not apply, in the fall.

The announcement follows the June announcement of a second new Tesla showroom, scheduled to open in 2025 on Oneida Indian Nation land in rural New York.

Lori Brown, executive director of the Connecticut League of Conservation Voters, which has lobbied for years to alter Connecticut’s law, stated, “I believe it was a move that made perfect sense.”

“It’s just surprising that it took this long, given that Tesla, Lucid, and Rivian all tried so hard,” she said, referring to two other electric vehicle manufacturers. Anything that increases the number of electric vehicles on the road benefits the public.

Brown noted that, regardless of their political affiliation, legislators with active auto dealerships in their districts have historically opposed bills authorizing direct-to-consumer sales.

There must be a balance between respecting tribal sovereignty and “maintaining a level playing field” for all car dealerships in the state, according to the Connecticut Automotive Retail Association, which has opposed such measures for years.

The association Acknowledges Mohegan Tribe’s Sovereignty, but Maintains Opposition to Tesla’s Direct Sales Approach

The association’s chairman, Hayden Reynolds, said in a statement, “We respect the Mohegan Tribe’s sovereignty and the unique circumstances under which they operate their businesses on Tribal land. However, we continue to oppose Tesla and other EV manufacturers with direct-to-consumer sales.” “Connecticut’s dealer franchise laws benefit consumers and provide a competitive marketplace.”

Tesla has sought and been denied dealership licenses in a number of states over the years, pressed for law changes, and challenged decisions in court. In January of this year, the Supreme Court of Delaware reversed a ruling affirming a decision by state officials to prohibit Tesla from selling cars directly to customers.

According to Jeff Aiosa, executive director of the Connecticut dealers association, at least 16 states have changed their laws to allow Tesla and other direct-to-consumer manufacturers to sell there. He does not anticipate Connecticut altering its law, citing the fact that 32 “original equipment manufacturers,” a list that includes Toyota and Ford, presently comply with it.

“It is not fair to have an uneven playing field when all other manufacturers adhere to state franchise laws and Tesla wants to circumvent the law,” he said. “I would suggest that their pivot to the sovereign nation is indicative of their unwillingness to obey the law.”

In 2021, Tesla launched its first store and service center on Native American land in New Mexico. The facility, constructed in Nambé Pueblo, north of Santa Fe, represented the first time the company partnered with a tribe to circumvent state laws, despite the fact that the idea had been in the works for years.

Brian Dear, president of the New Mexico Tesla Owners Club, predicted at the time that states that are home to tribal nations and have laws prohibiting direct auto sales by manufacturers would likely follow New Mexico’s example. He stated, “I have no belief that this will be the last.”

Tesla’s facility at Mohegan Sun, which will be known as the Tesla Sales & Delivery Center, will be located in a retail and culinary pavilion within the expansive casino complex. Within the resort, customers will be able to test-drive models. And gamblers will be able to use their loyalty points to purchase Tesla vehicles. Tesla also intends to display its solar and storage products at the venue.

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Source: ABC News

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