Tesla last week opened a new sales, service, and delivery centre in the US state of New Mexico, which might not seem particularly newsworthy, except that New Mexico does not allow automakers to sell directly to customers, requiring Tesla to exploit a loophole by partnering with a Native American tribe.
The new Tesla dealership was opened last week in a shuttered casino in the sovereign Pueblo of Nambé, the tribal lands of the Native American Pueblo people and, fortuitously for Tesla, a federally recognised Native American tribe with sovereignty and exclusion from state laws.
Located at the Nambe Falls Travel Center in a former casino that went defunct in 2017, the new Tesla sales, service, and delivery centre will mean not only that Tesla can sell directly to the New Mexico public, but that existing Tesla owners will no longer need to get their car in Colorado or drive to Arizona or Texas for servicing.
This is the first time an automaker has signed an agreement with a sovereign Native American entity and sets a landmark precedent for future cooperation.
“It was a cooperative effort between Tesla and the pueblo,” said Nambe Pueblo Governor Phillip Perez, speaking at the ribbon-cutting ceremony last week, as covered by the Santa Fe New Mexican. “It didn’t take long to come to terms.”
“We are doing our part to protect Mother Earth. We are proud to be the first tribe to have Tesla on Indian lands. This is really great that we are able to pave the way for New Mexico with renewable energy.”
New Mexico legislation bans vehicle manufacturers from selling directly to consumers or providing service through their own facilities. Instead, the state requires all automakers to work through franchise dealerships.
Conversely, Tesla does not franchise its sales, service, and delivery centres as dealerships, all of which are company-owned, and thus creating an impasse for US state’s which prevent vehicle manufacturers from selling directly to the public.
Legislation was brought in 2019 in an attempt to make a break from the absurd strictures placed on automakers, which would have allowed manufacturers to set up their own sales and service dealerships if they met three key criteria …. that the business had no franchise dealers in New Mexico; the automaker sold and serviced only vehicles that it made; and that it sold only electric vehicles powered by batteries or fuel cells.
The bill failed to pass due to significant opposition from the state’s existing auto dealers and remains in limbo. At the time that the bill was first introduced, Charles Henson, president of the New Mexico Automotive Dealers Association, lambasted the proposed legislation, saying it opened the door for vehicle manufacturers to compete with the millions invested by local dealers.
The bill was introduced by State Senator Jerry Ortiz y Pino, a Democrat from Albuquerque, who told the Santa Fe New Mexican he was happy to hear that Tesla had found a way around the state’s existing legislation.
“It’s a clever idea,” he said. “I think they found a way around it.”
Ortiz y Pino also explained that the auto dealers had been “absolutely opposed” to the legislation he proposed back in 2019, adding that the dealerships “are licenses to print money.”
“If you have the Ford dealership in Santa Fe or Albuquerque or Las Cruces, you’re guaranteed to have a nice living because [customers] have to come to you; they can’t go anywhere else,” Ortiz y Pino told the New Mexican.
“It’s not exactly a monopoly because there could be two dealerships in one community, but they limit the franchises so that they maintain highly profitable relationships with their franchisors.”