Tesla lost the lawsuit

Tesla lost the lawsuit

Elon Musk, chief executive of Tesla, told shareholders on Thursday that they will be moving the company's headquarters from Palo Alto, Calif., to Austin, Texas. File Photo by Terry Schmitt/UPI | License Photo

Tesla had its lawsuit against the State of Louisiana that aimed to enable direct sales of vehicles thrown out by a federal court late last week in an effort to fight stressful car buying.

Tesla has operated with a direct-to-consumer sales model, which fixes prices on vehicles unless the automaker adjusts them.

It eliminates the process of bargaining with salespeople at dealerships and gives every buyer the same price, getting rid of what most consumers say is one of the most stressful parts of car buying.

In numerous states, Tesla is allowed to operate this model, although legacy automakers have fought against the company’s ability to do so because they have argued it harms consumers by limiting competition.

Tesla decided to sue the State last year as its Motor Vehicle Commission was attempting to stop Tesla from providing warranty repairs at the New Orleans Service Center. The automaker argued that the limitations against direct sales models “effectively shut out of Louisiana the consumer-centric, free-market solution that is a more efficient, consumer-friendly business model for today’s automotive consumer.”

Tesla was hoping to overturn the State’s decision that refused to allow it to sell vehicles directly to customers. A decision was made last week, and it was not in Tesla’s favor.

On Friday, a Federal court threw out Tesla’s complaint, bringing an end to this chapter of the company’s fight against its sales model in Louisiana.

The ruling, seen by Reuters, said, “The direct sales ban applies equally to all manufacturers, and Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisana Legislature.”

Direct sales bans would affect any company that uses the model to sell vehicles, and most of them are EV makers.

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