The Virginia Automobile Dealers Association is pressing its legal challenge against electric automobile maker Tesla Inc.’s company-owned store in Henrico County.
The powerful trade group, which represents independent automobile dealers in Virginia, said Thursday that it will appeal a Richmond Circuit Court decision from June that upheld a 2016 ruling by the commissioner of the Virginia Department of Motor Vehicles allowing Tesla to open its own dealership in Henrico.
A spokesman for the dealers association said the organization has filed a notice of appeal with the court, but it has not yet filed the appeal itself.
The dealers association has challenged Tesla’s legal right to operate the store on the grounds that state law prohibits automobile manufacturers from owning dealerships except under limited exceptions.
Tesla, which was founded by tech industry tycoon Elon Musk, has argued that its direct-to-consumer business model means no independent dealer could sell its cars profitably.
Despite the legal challenge by the dealers association, Tesla opened the showroom and service center at 9850 W. Broad St. in August 2017.
“The law of the commonwealth exists to protect Virginia consumers, and we are appealing the Circuit Court’s decision to uphold the integrity of our motor vehicle dealer franchise statute,” said Don Hall, the Virginia Automobile Dealers Association president and chief executive officer, in a statement released by the group.
“The Circuit Court decision allowed the ruling of the [DMV] commissioner to stand, but the judge expressed serious misgivings about the lack of evidence and the commissioner’s decision to allow Tesla to continue to operate in a way wholly inconsistent with the intent of the law and the General Assembly.”
In his ruling issued June 21, Judge Gregory L. Rupe of Richmond Circuit Court said he disagreed with DMV Commissioner Richard D. Holcomb’s analysis, but he said the court could only reverse the commissioner’s decision if he acted “arbitrarily or capriciously.”