Tesla has reached a settlement with the state of Louisiana, ending what has been a multi-year legal battle over the state’s ban on direct vehicle sales. The settlement, disclosed in a dismissal motion filed in New Orleans federal court on Monday reported by Reuters, resolves all claims between Tesla, Louisiana officials, and local dealership associations, although the details of the settlement remain unclear.
The dispute dates back to August 2022, when Tesla sued members of the Louisiana Motor Vehicle Commission, the Louisiana Automobile Dealers Association, and dealership owners who sat on the commission. Tesla argued that Louisiana’s 2017 law banning direct vehicle sales to consumers unfairly targeted its business model, which bypasses traditional franchised dealerships.
The lawsuit alleged that certain motor vehicle commissioners—many of whom had ties to competing dealerships—used their regulatory power to limit Tesla’s ability to sell, lease, and service vehicles in the state. Tesla called the law an “existential threat” to its operations, accusing the commission of acting to protect entrenched dealership interests rather than consumers.
In mid-2023, a federal judge dismissed Tesla’s lawsuit, but the automaker received some federal help in August 2024 when the 5th U U.S. Circuit Court of Appeals in New Orleans ruled in favour of Tesla, allowing the company to continue its lawsuit. The appeals court also overturned the dismissal of Tesla’s antitrust claim, citing evidence of potential bias within the commission.
Despite these wins, the case continued to wind its way through the courts. Earlier this year, the U.S. Supreme Court declined to hear an appeal by 18 commissioners seeking to overturn the 5th Circuit’s decision. With Monday’s settlement, Tesla’s claims have now been “fully and finally resolved,” according to the court filing.
The settlement represents another step in Tesla’s ongoing campaign to challenge dealership laws across the U.S. Tesla has argued that direct sales offer customers a more transparent buying experience, with fixed pricing and a seamless online ordering process. While Tesla has successfully overturned or worked around similar bans in some states, others—like Texas and Michigan—have resisted changes to their franchise laws.
Louisiana’s settlement could signal a softening stance toward EV makers that rely on direct sales, particularly as consumer demand for electric vehicles continues to grow. However, details of the settlement remain confidential, and it is unclear whether it will lead to legislative changes allowing Tesla to open direct sales locations in the state.
What’s Next for Tesla in Louisiana?
Tesla currently serves Louisiana customers primarily through online sales and service centers in neighboring states. The resolution of this case may pave the way for new discussions with state lawmakers or regulatory bodies regarding direct sales.
Also Read:
• Tesla Appeals Wisconsin Ruling Over Direct Sales Ban
• Tesla’s Direct Sales Model Under Threat in New York
• Tesla wins appeal to allow direct sales in Delaware
