Tesla skirts Connecticut direct-sales ban with store in tribal casino

Roughly a decade after opening its first company-owned stores, Tesla is still fighting direct-sales bans in some states. In Connecticut, it’s skirting one such ban by locating a store in a Native American casino.

The Mohegan Sun casino on Wednesday announced that Tesla will open a “sales and delivery center” at the casino’s mall, with customers able to buy or pickup Tesla electric cars as early as this fall, as well as test drive vehicles, according to a Connecticut Mirror report.

Tesla does have a showroom in Milford, Connecticut, that allows leasing, but this location allows the automaker to do more without butting up against state laws.

Tesla Supercharger

Tesla Supercharger

Connecticut is one of several states with franchise laws that prevent automakers from selling cars directly to customers. But Mohegan Sun, located in the village of Uncasville in the southeastern corner of the state, is on Mohegan tribal land. Tribes have leeway to set different policies to boost economic development, the report noted.

Tesla has used this strategy at least one other time. In 2021 the automaker opened a store on tribal land in Nambé Pueblo, north of Santa Fe, New Mexico, avoiding conflict with that state’s franchise laws. It also provides an option for Lucid and Rivian as those automakers look to set up their own direct-sales retail networks.

In Connecticut, Tesla has been fighting franchise laws for a long time, with multiple bills being presented in the state legislature to open up direct sales. Last year one bill failed to come up for a vote in either chamber of the legislature, and this year another bill didn’t get a hearing before the transportation committee, the Connecticut Mirror noted.

Tesla Supercharger

Tesla Supercharger

Franchise laws have created a more awkward situation in another state. Tesla still can’t directly sell the cars it makes in Texas in Texas—even though it’s the only Texas-based automaker.

This complicated landscape is probably one of the reasons why Volvo opted not to embrace direct sales as soon as it originally planned to, and why Polestar sticks to direct sales but depends on Volvo stores for much of its service network. And why Ford went for a hybrid approach—requiring no-haggle EV pricing at dealerships.

The controversy over direct sales has led to a strange division by political party, with Democratic leaning states generally allowing more flexibility and Republican leaning states tending to be more protectionist and anti-free-market about direct sales.

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