Tesla’s Richmond debate rolls on

Several Teslas have dotted the DMV parking lot during the hearings. Photo by Linda Dunham.

Several Teslas have dotted the DMV parking lot during the hearings. Photo by Linda Dunham.

The debate over whether Tesla can open a dealership in Richmond goes around and around.

Lawyers for the California-based electric car maker and the Virginia Automobile Dealers Association endlessly sparred again Monday at another day-long hearing before the DMV, prompting the need to continue the matter at yet another meeting to be held at a future date.

At Monday’s hearing, both sides resumed where they left off at a heated initital March 31 meeting.

The VADA, an advocacy group for franchised dealers of cars and trucks, sought to bolster its argument that Tesla is trying to forgo state law that says car manufacturers can only sell directly to consumers if no independent dealers are available to do so in a way consistent with the public interest. The group called upon car dealers to testify to their interest in becoming independent sellers of Tesla cars.

Tesla spent much of the day cross-examining VADA’s witnesses, hoping to strengthen its argument that its set pricing for cars makes it impossible for independent dealers to sell Teslas in a profitable way. And previous attempts by Virginia dealers to get in touch with Tesla were done at the prompting of VADA president Don Hall.

Monday’s hearing at the DMV building at 2300 W. Broad St. was officiating by hearing officer Daniel Small, who will make a report to DMV commissioner Richard Holcomb on the question of whether Tesla can sell directly to consumers in Richmond. A decision from Holcomb about whether Tesla can move forward with its plans in Richmond could take up to 90 days from the time he receives the report.

Tesla has leased the property formerly housed by Bassett Furniture.

Tesla has leased the property formerly housed by Bassett Furniture.

Meanwhile, Tesla already has its preferred spot in Richmond secured, having leased a 30,000-square-foot building at 9850 W. Broad St.

Its attempts to open a dealership in Richmond prompted a lawsuit from VADA in March, which claimed that Tesla and DMV violated an agreement that let the car company open its initial Virginia store in Tysons Corner.

VADA lawyer Brad Weiss’ questioning of Liza Borches of Carter Meyers Automotive and fellow dealer Dave Perno of Priority Automotive Richmond attempted to highlight Tesla’s lack of response to Virginia dealers’ inquiries. Weiss said that dealers can’t charge exorbitant interest rates to boost profits because financing rates are capped by the Consumer Financial Protection Bureau.

“A lot of manufacturers we work with don’t look at this as an adversarial relationship,” Borches, a VADA board member, said in her testimony, adding that selling gas cars alongside electronic cars like Tesla’s doesn’t present a conflict of interest for dealers.

Tesla lawyer Dan Bookin, filling in for George Riley, said in cross-examination that letters of inquiry to Tesla were sent at the prompting of VADA years after Tesla began selling cars. Bookin submitted as evidence messages and an op-ed from VADA president Hall concerning the fight to keep Tesla from selling directly to consumers in Richmond.

“They’re trying to oppose Tesla opening a store – isn’t that why we’re all here?” Bookin asked.

Perno, a Tesla stock owner, said on the stand that he believes Tesla will eventually have to sell its cars to dealers at a discount. Despite its shares trading well over the $200 mark, Tesla has yet to become profitable. Citing the example of the Volkswagen emission scandal, Perno said dealers are better suited to look out for consumers than manufacturers are.

Bookin questioned Perno as to whether he thought he knew what was better for Tesla than the company did. Perno said he wasn’t that “arrogant” but thought his experience could serve them.

“Tesla is in its retail infancy,” Perno said. “I believe I will take their distribution problem off their hands.”

When Bookin requested that members of the public be allowed to testify at the hearing, Weiss objected, contending that Tesla’s packing the audience at the hearing wasn’t a true measure of the public interest. He then said that Tesla’s suggestion that it hadn’t rallied its fans to attend yesterday’s hearing was an attempt by Bookin “to dance snowflakes on a pinhead.”

“No further snow flakes,” Bookin said, before five members of the public were sworn in.

All the members of the public who testified were Tesla owners who expressed their satisfaction with traditional car buying experiences and exuberance for Tesla.

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