Video says car dealers 'under attack' from Tesla

A Tesla Model S in a Tesla showroom in Brooklyn, New York
Spencer Platt | Getty Images

Don Hall says he is a "gladiator" fighting attacks from Tesla on Virginia auto dealers, and in a recent video he encourages fellow dealers to do "whatever it takes" to win.

Tesla is trying to open its second store in Virginia, but not without considerable resistance, according to The Washington Post. Some Virginia auto dealers, along with many across the country, see Tesla's direct-to-consumer business model as a threat to their own businesses.

Recently, Virginia Auto Dealers Association president and CEO Don Hall was featured in a video sent to dealers in that state saying the franchise "system is under attack by the likes of Tesla and many others out there."

"Look at the many other industries that have been attacked and have changed dramatically," Hall said in the video. "Our industry is next. It's on the hit list. But we can do something about it."

A call to Hall's office seeking comment has not yet been returned.

Tesla won the right to open a single store in Virginia on the heels of a successful lawsuit, but the state Department of Motor Vehicles will decide in mid-December whether to allow a second store.

The battle in Virginia mirrors those in many other states.

Tesla is licensed to sell cars in 23 states and Washington, D.C., but auto dealers have still attempted to block the company from many parts of the country, often relying on old dealer franchise laws originally designed to prevent auto manufacturers from undercutting their own dealers.

Tesla has argued that the laws do not apply to them, since Tesla has never relied on dealers to sell cars.

Tesla has not warmed to the franchise model. Chairman and CEO Elon Musk has argued that auto dealers have "a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none."

Musk has also argues that electric cars need less maintenance than those with internal combustion engines, removing a key revenue stream for dealers.

Tesla is currently fighting legal battles in both Michigan and Utah courts over laws in those states, and in September was on the losing end of a court ruling over vehicle sales in Missouri.