Elon Musk: Tesla not violating the law

Elon Musk: Tesla not violating the lawIn response to the two recent lawsuits filed against electric car maker Tesla, questioning the company's right to sell cars straight to customers and not through dealerships, the automaker's co-founder Elon Musk has said that the in-question move by Tesla does not violate the law.

Musk's statement came after New York and Massachussetts auto-dealers sued Tesla last week for opening company-owned dealerships. In their lawsuit opposing the move by Tesla, the auto-dealers said that the automaker had violated state franchise laws which essentially prevent automakers from opening their own company stores which compete with independently-owned franchises.

With Automotive News having revealed that as many as 48 US states either forbid or restrict company ownership of dealerships, the New York and Massachusetts auto dealers have chiefly highlighted those laws to take the legal route against Tesla, in their attempt to get the automaker to shutter its company-owned stores.

Meanwhile, Tesla is apparently ready to fight the lawsuits, with MusK asserting in a recent statement that Tesla is not breaking any laws. The reason which Musk has put forth for supporting his argument is that the company's showrooms differ from regular company-owned dealerships because they are typically located in retail malls.

Further adding that the sale of electric cars marks a conflict-of-interest for most dealers as a large chuck of their business still comes from the sale of gasoline cars, Musk said: "It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business."