Georgia Dealers Want Tesla Store Shut Down for Selling Too Many Teslas

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( — September 3, 2014)  — The Georgia Auto Dealer Association filed a petition with state officials seeking to cancel Tesla’s license to sell its cars in the state of Georgia. Tesla’s crime? Selling 173 cars directly from a factory-owned store located 25 miles away from Atlanta, the only Tesla retail location in Georgia.

The group, which represents 500 dealerships, asked that Tesla’s license be revoked and the agency block sales of Tesla’s Model S sedan at its shop in Marietta, near Atlanta. The new dispute follows similar spats this year with dealers in Missouri, New Jersey, New York, Ohio and Pennsylvania.

Elon Musk, Tesla’s co-founder and chief executive officer, said it’s the unique nature of the Model S, priced from $71,000, and electric cars in general, that makes Tesla a bestseller.

However, Bill Morie, president of the Georgia dealers association, told Automotive News that what they ask is very simple.

“We want them to comply with the law the way others are,” said Morie.

 The carmaker’s license in Georgia allows it only to sell vehicles made “in accordance with custom design specifications of the customer” and retail fewer than 150 a year, the group said in the petition. Between October and June, Tesla sold 173 sedans at its suburban Atlanta outlet, its only store in the state, according to a copy of the petition obtained by Bloomberg News from the revenue department.

The elimination of the only store in a state of 10 million people may seem like a minor blow given that there is still a five-month waiting list for the Tesla Model S. But the long-term cost to Tesla may be far greater than most consumers and investors would imagine since the nearest Tesla store is more than 4hrs-drive away.

Liz Jarvis-Shean, a spokeswoman for Tesla, declined to comment on the petition. Nick Genesi, a spokesman for the Georgia agency, confirmed the petition was filed yesterday, without elaborating.

Tesla stock rose 2.2 percent to a record $269.70 yesterday in New York, the highest closing price since the company’s June 2010 initial public offering. The stock has risen 79 percent this year, and expected to rise further more in the future.

The company, based in Palo Alto, California, said yesterday it reached an agreement with China United Network Communications Corp., the country’s second-largest mobile-phone company, to create a vehicle-charging network.

Tesla’s sales in China may match its US retail by as early as 2015, and eventually become its biggest single market. The company’s overseas prospects may lessen the significance of its domestic disputes with dealers. So far this year, Tesla Motors Inc. (NASDAQ:TSLA) is selling about 638 cars a month in six key Northern European countries, ahead of Nissan’s 588 Leafs a month.

At this rate, Tesla will deliver about 7,600 Model S sedans in the EU region only, or about 20 percent of the “more than 35,000” Model S cars it expects to deliver this year, the company’s most recent  estimate say.