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Business conflict over second Tesla Virginia dealership

It is a nearly two-hour drive south from McLean to Richmond. And if Elon Musk has his way, you will make the trip in a new Tesla electric car. The company is currently in a legal dispute with the Virginia Automobile Dealers Association over a Virginia Department of Motor Vehicles decision to allow the California-based firm to open a company-owned dealership in Richmond.

A Richmond Circuit Court judge has ruled that the dealers association has legal standing to challenge the DMV's decision, saying the organization is indeed an “aggrieved party” that can appeal the late 2016 decision by DMV Commissioner Richard D. Holcomb.

Tesla sells its battery-powered cars in two ways: online and at company-owned stores like the one in Tysons Corner. The outlet opened in early 2015 and is the firm's only Virginia company store. In that case, Tesla reached a settlement with the dealers association and DMV before opening the dealership.

In the proposed Richmond store, the association argues that Tesla should sell its vehicles from independent dealerships as other manufacturers must do in most situations, according to Virginia law.

Attorneys for the Virginia Attorney General’s office and Tesla argued that the dealers group lacks legal standing to appeal the DMV decision because the association isn't actually in the business of selling cars and therefore has no direct financial interest in the matter.

Tesla's argument is that its technically complex vehicles can't be effectively, profitably sold by independent dealers.

Clearly, business interests are often in conflict and require a court to consider the merits of both sides. In these cases, an attorney experienced in business litigation can make all the difference in determining whose interests prevail.

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