Tesla wins a major victory over the auto-dealer cartel

Despite what you may have heard to the contrary, Monday was a good day for Tesla (TSLA).

Responding to a lawsuit brought by the Massachusetts State Automobile Dealers Association who were attempting to block Tesla's direct sales in the state, the Massachusetts Supreme Judicial Court ruled unanimously in favor of the love-it-or-hate-it electric vehicle company.

According to the decision, written by Justice Margot Botsford, the lawsuit was an effort to over-apply a law that exists in order to prevent dealers from having to compete against the manufacturers with which they have ongoing business relationships, and therefore does not include Tesla, which sells all of its vehicles directly.

Speaking to Reuters, Todd Maron, deputy general counsel at Tesla, said the following: “It's a great decision. The statute is very similar to statutes in other states. We have battles in New Jersey and other states with similar constructs, and we hope and expect the same interpretation would carry over to those venues.”

The victory comes at a time when even Tesla's biggest supporters, including its CEO, Elon Musk, are questioning the company's stock price, and while it does nothing to address the stock's high valuation, the decision does, at least, provide reassurance that Tesla's sales are not going to be derailed by auto-dealers.

The actions of auto-dealers in Massachusetts and other states have made them look like a cartel, and have caused many to openly question why such a group should wield such a disproportionate amount of political power. They may also – by giving the appearance of panic – have raised interest in Tesla over the course of the last year. At its current size, Tesla doesn't pose much of threat to these dealers, hence, their actions only make sense if they think Tesla will grow much larger.

It seems that even while everyone else is in doubt, auto-dealers remain true Tesla believers. 

Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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