Tesla Reaches Deal to Keep Selling in New York

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Washington DC The AIADA newsletter reported that CNN Money said that Tesla Motors will be able to continue to sell cars in New York state, and may eventually move to the dealership model that it has always fought.

Tesla (TSLA) and the New York Automobile Dealers Association have reached a compromise in their battle over Tesla's existing five stores in New York City and surrounding suburbs. The dealers had been pushing to shut down the stores, charging that they violated dealership laws that prohibit selling directly to customers.

All other automakers rely on independently-owned dealers to sell cars. As part of the compromise announced late Friday, Tesla can continue to operate its existing stores but new ones will be allowed only through dealerships.

Tesla said it is happy with the agreement, an indication that it plans dealerships in the future. Tesla has argued that it needs direct sales to consumers so its own sales people can explain the advantages of electric cars. It says that if it had to use dealers who also sell cheaper, gas powered cars, the dealers would neglect the Tesla Model S, which has a starting price of $69,000.

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