Tesla has officially settled a high-profile lawsuit challenging Louisiana’s longstanding ban on direct-to-consumer vehicle sales. The case, which targeted state officials and influential dealership groups, marks a significant moment in Tesla’s ongoing efforts to reform car sales laws across the United States.
The lawsuit, originally filed in August 2022, alleged that members of the Louisiana Motor Vehicle Commission, along with certain dealerships and the Louisiana Automobile Dealers Association, deliberately blocked Tesla’s ability to operate in the state without a franchised dealership model. Tesla argued that the ban not only restricted its ability to sell vehicles directly to consumers but also imposed limitations on leasing and servicing its vehicles in Louisiana.
According to a dismissal motion filed in the U.S. District Court in New Orleans, all of Tesla’s claims have been “fully and finally resolved.” Although details of the settlement were not publicly disclosed, the resolution brings an end to a legal dispute that has drawn national attention. State officials, meanwhile, asserted that they were acting within the law and had not violated any criminal statutes.
Background of Legal Battle
Tesla’s lawsuit accused rival dealership owners serving on the commission of leveraging their regulatory authority to stifle competition from Tesla, which does not rely on traditional franchised dealerships. The electric vehicle manufacturer characterized these actions as an attempt to preserve their own business models by treating Tesla’s direct-sales approach as an “existential threat.”
In a notable legal twist, the U.S. Court of Appeals for the Fifth Circuit in August 2024 revived Tesla’s constitutional due process claim and overturned a prior dismissal of its antitrust claim. This development signaled potential judicial concern over possible bias against Tesla, headquartered in Austin, Texas.
Adding further complexity, the U.S. Supreme Court last month declined to hear an appeal brought by 18 motor vehicle commissioners who were involved in the case. This move effectively upheld the appellate court’s decision, clearing the path for the parties to negotiate a resolution.
The case, formally titled Tesla Inc et al v. Louisiana Automobile Dealers Association et al, has now concluded in the Eastern District of Louisiana under case number 22-02982. As Tesla continues to push for broader adoption of its direct-to-consumer model across the country, this Louisiana settlement may serve as a precedent in other states with similar regulatory hurdles.
Other Tesla developments
Back home, Tesla entered the India market last week with the launch of Model Y at a starting price of Rs 59.89 lakh (ex-showroom). It is currently available for bookings in Mumbai where the company has just inaugurated its first showroom in the country. Available in both Standard Range and Long Range variants, Tesla is also offering its fully self-driving (FSD) technology with the Model Y at an additional cost of Rs 6 lakh.
(With inputs from Reuters)
