Tesla Inc. v. the Delaware Division of Motor Vehicles

Summary

The Court reversed the denial of Tesla’s Delaware dealer-license application and remanded for further proceedings. It held that the Licensing Act permits the DMV to consider compliance with the Franchise Act, but the Franchise Act’s definitions do not cover Tesla’s direct-to-consumer business model because Tesla has no franchised dealers and does not manufacture vehicles sold to such dealers. The Court also rejected the DMV’s alternative arguments that Tesla’s vehicles must satisfy the Franchise Act’s definition of “new motor vehicles” and that Tesla’s out-of-state subsidiaries qualify as dealers under that Act.