Tesla is working on opening new stores on tribal lands. This allows them to sell their cars directly to customers, even in states where the law prevents manufacturers from selling directly to consumers. Instead, they are required to use a dealership model. One of the locations is Mohegan Sun, a popular casino and entertainment place in Connecticut owned by the Mohegan Tribe. Tesla will open a showroom there this autumn. Since it’s on tribal land, the state’s laws don’t apply, so that Tesla can sell their cars directly to customers. In addition, Tesla also announced plans to open another showroom in upstate New York on the lands of the Oneida Indian Nation. This will happen in 2025.
“I think it was a move that made complete sense,” said Lori Brown, executive director of the Connecticut League of Conservation Voters, who has lobbied for years to change Connecticut’s law.
“It is just surprising that it took this long, because Tesla had really tried, along with Lucid and Rivian,” she expressed, alluding to two other electric car manufacturers. “Anything that puts more electric vehicles on the road is a good thing for the public.”
Brown pointed out that historically, lawmakers with car dealerships in their districts, regardless of their political affiliations, have consistently opposed bills that permit direct-to-consumer sales.
Connecticut Automotive Retail Association’s Stance on Tesla’s Direct-to-Consumer Sales Model
The Connecticut Automotive Retail Association, which has been against such bills for years, emphasizes the importance of finding a balance between respecting tribal sovereignty and ensuring a level playing field for all car dealerships in the state.
“We respect the Mohegan Tribe’s sovereignty and the unique circumstance in which they operate their businesses on Tribal land, but we strongly believe that this does not change the discussion about Tesla and other EV manufacturers with direct-to-consumer sales, and we continue to oppose that model,,” stated Hayden Reynolds, the association’s chairperson. “Connecticut’s dealer franchise laws benefit consumers and provide a competitive marketplace.”
Over the years, Tesla has encountered numerous challenges in various states while seeking dealership licenses and advocating for changes in laws to allow direct-to-consumer car sales. However, the company achieved a significant victory earlier this year when the Delaware Supreme Court overturned a ruling that had prevented Tesla from selling its cars directly to customers in the state.
Jeff Aiosa, the executive director of the Connecticut dealers association, mentioned that at least 16 states have already modified their laws to permit Tesla and other direct-to-consumer manufacturers to operate within their borders. However, he believes Connecticut is unlikely to follow suit, as 32 original equipment manufacturers, including major car companies like Toyota and Ford, follow the current law. Aiosa argued that it would be unfair to create an uneven playing field by making an exception for Tesla to bypass existing state franchise laws.
Innovative Approach of Tesla, Partnering with Native American Tribe to Overcome State Restrictions
Despite facing roadblocks in some states, Tesla took a new approach in 2021 by partnering with a Native American tribe in New Mexico. They opened their first store and repair shop on Nambé Pueblo, located north of Santa Fe, effectively circumventing the state’s laws that had previously restricted direct car sales by manufacturers. Brian Dear, the president of the Tesla Owners Club of New Mexico, believed that other states with tribal nations and similar restrictive laws might consider following New Mexico’s example.
Tesla’s journey to secure direct sales rights has been met with resistance in several states. Still, they have found success in some cases by collaborating with tribal nations to operate within the confines of the law.
Tesla has chosen a prime location for its new facility, the Tesla Sales & Delivery Center, situated at Mohegan Sun’s shopping and dining pavilion, which forms part of the extensive casino complex. This strategic spot allows customers to experience test drives of Tesla models amidst the resort’s surroundings.
Excitingly, the collaboration with Mohegan Sun also means that gamblers who have accrued loyalty rewards can utilize them towards their Tesla purchases, making it a unique and rewarding experience for both casino visitors and potential Tesla buyers.
