Tesla Dodges Direct Sales Ban in New Mexico, Opens Sales Center on Tribal Land
The electric automaker has railed against the established dealership model, and it isn’t giving up the fight.
For all the controversy and excitement, you can say one thing about Tesla—it likes to do things differently. One of the biggest areas in which Tesla differs from established players is its insistence on sticking to a direct sales model. It's seen major opposition to this push from dealers and government bodies alike. However, in New Mexico, the automaker found a break, by opening a sales and service center on tribal land, reports The Hill.
The move saw praise from Governor of New Mexico Lujan Grisham in a recent press release, which supported the partnership between Tesla and the Pueblo of Nambé. The new venture operates out of what was a defunct casino. With the area officially designated as tribal land, state law does not apply, thus allowing Tesla to run its direct sales operation free of legal issues. The state has long upheld a ban on direct automotive sales, under Section 57-16-5-V of the New Mexico statues.
As covered by KRQE, the new facility has also been celebrated by locals and the Tesla fanbase alike. Governor of Nambé Pueblo Phillip Perez noted that "This location will not only create permanent jobs, it is also part of a long-term relationship with Tesla." Meanwhile, founder of the Tesla Owners Club of New Mexico, Brian Dear, shared his "eternal thanks" on behalf of club members regarding the establishment of Tesla's official presence within the state.
The local population of the Nambé Pueblo is under 1700 people, however, the facility is only a half-hour drive from nearby Santa Fe. Albuquerque, the largest city in New Mexico, is a 90 minute drive away. With a combined population of over 600,000 people in the two cities, there should be a sizable potential customer base if people are willing to make the hike.
Tesla has been unrelenting in its push to establish direct sales across the nation. Eliminating third party dealerships that add their own profit margin allows Tesla to keep prices lower. Additionally, it avoids external businesses bearing its branding from potentially damaging its reputation through shady practices or just bad customer service. In pursuit of this goal, the company has been duking it out in the courts for years.
Dealerships have long held power as a lobby group and done much to cement their position in the industry through legislation in many states. Tesla have worked hard to find workarounds wherever possible, but it's slow going through politics and the courts.
Overall, it's a win for Tesla and another bruising blow to the dealership model in America. However, while the company may have won this battle, dealerships and their political allies will continue to fight the war.
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