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Tesla just lost a major court battle that could drastically affect its sales — the company calls it an 'unlawful conspiracy'

The decision is a blow to Tesla.

Tesla controversial car sales model

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Tesla, the electric vehicle manufacturer often shrouded in controversy, has taken on the car dealers of Louisiana in federal court and lost.

The EV company filed suit in August of 2022 against the Louisiana Automobile Dealers Association and the Louisiana Motor Vehicle Commission, alleging that the state's ban on direct-to-consumer car sales was unfair to Tesla and potential Tesla customers.

According to the lawsuit, filed in the U.S. District Court for the Eastern District of Louisiana, "Louisiana consumers' freedom is being unduly restricted by protectionist, anti-competitive, and inefficient state regulation," according to Reuters. In addition, Tesla accused the state's Motor Vehicle Commission and dealers' association of entering an "unlawful conspiracy to bar Tesla from doing business in Louisiana," Reuters reported.

In a decision rendered in June 2023, almost one year later, a federal judge in Louisiana dismissed the case

"The direct sales ban applies equally to all manufacturers, and Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisiana Legislature," the court's ruling said, per Reuters.

The decision is a blow to Tesla in its ongoing fight to get around anti-direct-to-consumer laws governing car sales in multiple states. The EV manufacturer's direct-to-consumer model that it prefers allows Tesla to avoid class-action lawsuits when something goes wrong with its vehicles, according to reporting by The New York Times.

Although Tesla is not always successful in fighting these laws, the company has had some wins. It was able to reach a settlement on a similar lawsuit it filed in Michigan in 2016, which stipulated that Tesla can "sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan; and, indirectly own service and repair facilities in Michigan through a subsidiary, Tesla Michigan," Reuters reported.

Tesla CEO Elon Musk branded this settlement as a win for the company, tweeting "Yay!" after it was announced, according to Reuters. Musk likely wasn't as enthusiastic about this latest ruling.

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