Tesla estimates that each year, residents of Wisconsin purchase between 3,000 and 4,000 of its EVs. However, due to state laws, none of these sales occur within Wisconsin. Instead, Wisconsinites must travel to neighboring states like Illinois or Minnesota to buy a Tesla.

Wisconsin’s “factory store” law prohibits vehicle manufacturers from owning dealerships, with limited exceptions. This law aims to prevent unfair competition between manufacturers and independent dealers. As a result, companies like Tesla, Ford, and Honda can’t sell vehicles directly to consumers in the state. Because Tesla’s business model doesn’t include independent dealers, it’s never had a single direct sale there.

Currently, Tesla operates galleries and service centers in Milwaukee and Madison. Consumers can view vehicles and arrange for service but can’t purchase a vehicle.

In March 2024, the EV maker applied for an exemption to this law. The company sought permission to convert its existing showrooms in Madison and Milwaukee into direct-sales dealerships. Tesla also expressed interest in opening additional dealerships in Glendale and the Appleton area. If approved, Wisconsin would have become the 28th state to allow Tesla to sell directly to customers.

However, in October 2024, an administrative law judge denied Tesla’s request. Tesla objected to this decision, but in December, a state administrator upheld the denial.

Undeterred, Tesla filed a petition in Outagamie County Circuit Court earlier this year. The company asked the court to overturn the previous decision or order a new hearing. Tesla argued that no independent dealer could meet its standards or profit under its direct-sales model. The company also claimed that the state’s decision violated its right to economic liberty under the Wisconsin Constitution, the Post Crescent shared.

The Wisconsin Department of Justice requested that Judge Mitchell Metropulos affirm the state’s decision.

The Wisconsin Automobile & Truck Dealers Association (WATDA) also wants the decision upheld and has asked to move the case to Dane or Milwaukee County. A procedural hearing is scheduled for late March, marking over a year since Tesla began this effort.

Tesla contends that its business model, which involves a uniform retail price and a direct-to-consumer approach, is incompatible with independent dealerships. The company believes that allowing direct sales would increase its vehicle sales in Wisconsin.

On the other hand, WATDA argues that Tesla is not prohibited from selling cars in Wisconsin but must do so through independent dealers. Representatives from major dealerships have expressed interest in selling Teslas and believe they can operate profitably without marking up prices.

As the legal battle continues, a hearing on WATDA’s request to change the venue is set for March 24 in the Outagamie County Courthouse in Appleton.