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Tesla in Nevada: Auto dealers give OK to Elon Musk’s direct sales

Tesla Motors CEO Elon Musk, left, and Nevada Gov. Brian Sandoval announce plans to build a battery factory in the Reno-Sparks area during a news conference at the Capitol in Carson City.
Tesla Motors CEO Elon Musk, left, and Nevada Gov. Brian Sandoval announce plans to build a battery factory in the Reno-Sparks area during a news conference at the Capitol in Carson City.
(Max Whittaker / Getty Images)

Elon Musk and Tesla Motors can expect a warm welcome from the automobile dealers of Nevada, once the company’s gigafactory deal with the state is done.

Reversing its position, and withdrawing plans to prevent Tesla from continuing direct sales of its Model S sedans to Nevada citizens, the Nevada Franchised Automobile Dealers Assn. is welcoming Musk with open wallets.

Wayne Frediani, executive director of the dealers’ trade group, said his organization was planning to protest the Nevada Department of Motor Vehicles’ decision to allow Tesla to conduct direct sales in the state -- as many auto dealers’ associations in other states have done.

When they heard about the deal to lure Tesla’s $5-billion battery factory to the Reno-Sparks area, however, “We took a big breath and tried to look at the big picture. We agreed to provide a carve-out in our franchise law for them.”

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Tesla’s business plan, which does not include the sort of nationwide dealer franchise used by most major automobile manufacturers, has been met with substantial push-back, and some legal action, in a number of states.

Earlier this month, the Georgia Automobile Dealers Assn. asked Georgia officials to bar the Palo Alto company from offering its Model S sport sedans and upcoming Model X SUVs at its Atlanta-area retail store.

But Frediani said his organization determined that Musk’s gigafactory will be bring more to the state economy than direct sales of his electric vehicles will take away from car dealers -- and will put a lot of new non-electric vehicles on the highways around northern Nevada.

“People are going to be working, and they’re going to buy automobiles -- from my dealers,” Frediani said. “And they’re not going to buy Teslas. They’re going to be buying pickup trucks from my dealers. You’re going to see a lot of new F-150s and Silverados running up and down I-80.”

Follow me on Twitter: @misterfleming


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