Tesla Outsmarts New Mexico Ban by Partnering With First Nations
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With well-maintained roads, relatively few traffic accidents, and beautiful scenery, New Mexico is a great place to drive and a popular road trip destination.
However, when it comes to buying cars, there are some old-fashioned rules which seem restrictive by modern standards.
One such rule is a ban on direct car sales. This ban has disproportionately affected Tesla, who never work with third-party dealers. As a result, New Mexico drivers who wanted to buy a Tesla were forced to buy out of state, or pay expensive fees to have the car delivered to their door.
However, thanks to Washington v. Confederated Tribes of Colville Indian Reservation (1980), the electric car giant has found a loophole. The law states that tribal sovereignty is only subordinate to the federal government, and state laws cannot be enforced on Indian reservations.
Taking full advantage, Tesla has opened its first New Mexican store on the tribal lands of the Nambé Pueblo first nation, just outside of Santa Fe.
What deal did Tesla make in New Mexico?
Why could Tesla not sell cars in New Mexico?
Electrek explains that Tesla was prohibited from opening its own showrooms or service centers due to an outdated New Mexico law, which sought to protect independent dealerships from large auto conglomerates.
By banning direct sales, automakers could not sell their cars to local dealers, and then undercut them by selling direct to New Mexicans.
However, critics have argued it is a violation of fair competition law, and used as a tool to delay electric vehicle adoption in the state. This is because Tesla never uses third-party dealerships.
Back in 2019, Tesla received some support from local legislators to have the ban overturned, but New Mexico dealer associations successfully stopped the California-based company in its tracks.
Fortunately for Tesla, it has now found a loophole, finally enabling it to establish an official presence in the state.
How did Tesla circumvent the archaic law?
Tesla has worked cooperatively with the Nambé Pueblo, leveraging the sovereignty of tribal land to bypass the statewide ban.
By opening its first store inside an old casino on the Nambé Pueblo reservation, Tesla is free to sell and repair cars without violating state law.
Electrek notes that Tesla already has a location in El Paso, Texas, just over the border from New Mexico, but this new service center is a game changer.
Just over an hour’s drive from Albuquerque (home to almost half of New Mexico’s population), and in between the wealthy communities of Los Alamos and Santa Fe, Tesla’s newest location could prove to be one of its most successful.
Indeed, one of the area’s largest employers, Los Alamos National Lab, has been busy installing EV charging stations in the area, suggesting the time is ripe for Tesla to swoop in and start convincing the locals to buy electric.