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Tesla discovers wildly creative loophole to sell cars in states where its showrooms were previously banned

Tesla previously implemented this strategy in New Mexico and New York.

Tesla tribal land dealerships

Photo Credit: iStock

Tesla has always preferred to sell directly to consumers through its own website and, increasingly, via in-person showrooms. But some state laws prohibit direct-to-consumer car sales. 

Now, Tesla has found a loophole to get around those laws — by selling its cars via showrooms on casino properties, which allows them to operate on tribal land.

According to reporting from Electrek, Tesla is about to launch direct-to-consumer sales for the first time in the state of Connecticut by partnering with the Mohegan Sun casino. 

The casino announced the news itself in a press release that read, in part: "Set to open this fall, the unique Tesla Sales & Delivery Center will be located in The Shops at Mohegan Sun. Locals and visitors alike will soon have the chance to take home the Model Y, Model 3, Model S and more."

Tesla previously implemented this strategy in New Mexico and New York, partnering with tribes in those states to open dealerships and skirt direct-to-consumer sales laws.

The EV manufacturer's previous attempts to open a store in Connecticut involved opening one store that masqueraded as a "gallery," which led the Connecticut Automotive Retailers Association to send in "secret shoppers" to prove that the gallery was actually a sales location.

The tribal land loophole, however, appears to be more solid, meaning that Connecticut residents should be able to purchase a new Tesla directly without crossing state lines in the near future.

Tesla's attempts to fight the state bans on direct-to-consumer car sales via the courts have not been as successful. 

The EV company sued the Louisiana Automobile Dealers Association and the Louisiana Motor Vehicle Commission last year, alleging that "consumers' freedom is being unduly restricted by protectionist, anti-competitive, and inefficient state regulation." 

That lawsuit was dismissed, however, by a judge who wrote that the law was fair as it applied to all car companies and not just Tesla.

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