Tesla Gets Around New Mexico’s Ban on Automakers Selling Directly to Customers

Tesla may have found a way to bypass the legislation that bars automakers from selling their vehicles straight to consumers by opening a sales, service, and delivery center in New Mexico. According to Business Insider, the move allows prospective customers to test vehicles at the center, and owners can take their cars there for repairs.

A red Tesla logo on a white building with a blue sky.
Tesla logo | Getty Images

New Mexico’s prohibitive laws on automakers

Like several other states, New Mexico has laws prohibiting the sale of electric vehicles directly to consumers without going through third-party dealerships. These laws emanate from old legislation put in place to protect car dealers from their suppliers. The idea was to prevent automakers from opening a company-owned store next to a third-party dealer after investing their resources in selling the automaker’s cars.

But trust people to find loopholes in any law. Car dealerships use these old laws to lockout automakers without deals with third-party dealers, such as Tesla, from selling their cars directly to the public, even though it’s healthy competition. But Tesla seems to have found a way to fight back.

With the help of some favorable legislators, Tesla attempted to push for new law in 2019. Still, local car dealers quickly flexed their political muscles, successfully stopping the giant automaker in its tracks. However, Tesla allowed nothing to dampen its spirits and continued to find ways around the prohibitive law.

Tesla beats them at their own game

The automaker has finally found a way around the ban, successfully opening its first-ever store and service center in an old casino in Santa Fe. Tesla managed to establish its presence in New Mexico by partnering with the first nation of Nambé Pueblo and making inroads into their tribal land. The move appears to have the hallmarks of the beginning of a watershed period for car shopping in New Mexico.

Already, the move is exciting Tesla owners in Santa Fe, who previously had to travel 300 miles to El Paso, Texas, to service their Tesla Model Y Performance. The excitement also caught up with the governor of Nambé Pueblo, Phillip Perez, who all smiles about being the first tribe to play host to Tesla on Indian lands.

Brian Dear, founder and president of the Tesla Owners Club of New Mexico, has also added his voice to the latest developments, stating that establishing a Tesla center in New Mexico can potentially change everything for owners and boost the sale of electric vehicles in the state.

What it means for Tesla’s future in New Mexico

https://www.youtube.com/watch?v=lr7V6OPnK2E

So, what does it mean for Tesla’s future after finding and exploiting a loophole in New Mexico’s ban on automakers selling directly to consumers without passing through third-party car dealerships?

Judging from the public’s response to opening a new center in New Mexico, Tesla car buying could be set to hit the stratosphere in coming years. Buyers and owners now won’t need to drive hundreds of miles to find a Tesla car or service one, and this means very few people would have qualms about owning a Tesla in New Mexico.

However, allowing the automaker to sell directly could have far-reaching implications for the economy of New Mexico. It may strip thousands of locals working in third-party car dealerships of their jobs, seeing that they employ thousands of people. It may not be long before these dealerships strike back in an attempt to kick Tesla out of the state.

It’s still not clear if Tesla can use the New Mexico turn of fortunes to build momentum to pursue other states that still ban direct car sales, such as Texas, Arizona, and Maryland.

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