Elon Musk’s Tesla Makes A Breakthrough In Louisiana

Louisiana's 5th Circuit Court of Appeals has revived Tesla's lawsuit alleging that dealers and organizations in the state have worked in unison to bar the electric vehicle manufacturer from selling directly to consumers.

Friday, August 26th, 2022 Tesla Finance LLC, a subsidiary of Tesla, filed a lawsuit in the U.S. District Court for the Eastern District of Louisiana alleging that a conglomerate of the Louisiana Automobile Dealers Association, officials of the Louisiana Motor Vehicle Commission and a handful of dealerships in the state have worked to target Tesla and shut down their business model in favor of their respective businesses.

In June of 2023 though Judge Sarah S. Vance dismissed the lawsuit for failure to state a claim, asserting that Tesla's claims may be factual but their lawsuit failed to provide a law that had been broken. This Monday, the 5th Circuit Court of Appeals reversed that decision by 2-1: "The Commission will always be incentivized to exclude new business models from entering the market," wrote Judge Jerry Smith of the 5th Circuit Court of Appeals.

Elon Musk's electric car company has already had to fight lawsuits like this in other states, such as Delaware. Last year Delaware's Supreme Court overturned the Delaware Motor Vehicle Franchising Practices Act which prohibited Tesla just as Louisiana's Motor Vehicle and Traffic Regulation Act which bars the company from selling directly to consumers in the state.

While Tesla can't be bought directly in Louisiana, the state currently provides a crucial role in the company's supply chain. Syrah Technologies has a facility in Vidalia that processes the mineral graphite necessary for Tesla's vehicle batteries.