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March 9, 2022

East Hartford revokes permit for planned Tesla service center

300 Connecticut Blvd. in East Hartford.

East Hartford’s Planning and Zoning Commission voted unanimously Tuesday evening to revoke a permit for a planned Tesla service center at 300 Connecticut Boulevard.

The center — which would have been the electric vehicle maker’s third location in the state — was first announced last year. The PZC signed off on the plans last April, but that decision came under fire in the form of a lawsuit filed by East Hartford-based Hoffman Auto Group, which argues that Tesla, which sells cars directly to consumers without going through dealerships, is trying to get around state law, which bans such sales.

The lawsuit names Tesla, the East Hartford Planning and Zoning Commission and the development firm working with Tesla on the project as defendants.

PZC Chairman John Ryan said that since the permit was revoked, the property reverts back to its original owner, which is Gengras Motor Cars of East Hartford. Tesla never officially purchased the property, property records show. 

Connor Martin, chief of staff for East Hartford Mayor Michael Walsh, told the Hartford Business Journal on Wednesday that the permit was revoked because of the Hoffman’s challenge.

It was not clear if the revocation would completely bar Tesla from applying for or opening a facility in town. Martin said that was a question for the city’s corporation counsel, Jim Tallberg, who was not immediately available to comment.

The Hoffman Auto Group issued a statement to Hartford Business Journal Wednesday, in response to the town's ruling.

“We applaud East Hartford’s decision to revoke the town’s previously issued approval thereby preventing Tesla from pursuing the 300 Connecticut Boulevard location in defiance of Connecticut law and local zoning restrictions," the company said. "It supports our position that the approval was wrongfully obtained, and that Connecticut law does not allow manufacturers to sell cars directly in Connecticut. The Hoffman family of 10 auto dealerships along with more than 250 other dealers statewide remain committed to defending this state’s pro-consumer franchise system which fosters healthy competition on a level playing field and will continue to resist global manufacturers from illegally entering our state in a way that would deprive local consumers of many of the protections they currently enjoy.”

Representatives for Tesla could not be reached for comment.

Hoffman Auto Group’s lawsuit accuses Tesla of camouflaging what Hoffman says is the company’s true intent — to sell cars directly to consumers in violation of state law — by filing vague applications with the town and misleadingly stating that it only wants to operate an automotive service center.

In Connecticut, car manufacturers cannot sell their products directly to customers without a dealer as an intermediary. This ordinance — known as the dealer franchise law — essentially bars Tesla, which only uses a direct-to-consumer sales approach, from establishing a presence in Connecticut beyond opening galleries and service centers, which it has done in Greenwich and Milford.

Tesla and sympathetic lawmakers in the General Assembly have fought for years to roll back the dealer franchise law, but the legislature has never moved to repeal or modify it. The state’s car dealers, including Hoffman, have mobilized repeatedly to block Tesla’s efforts, saying customers will suffer if they do not have a dealer to turn to when they encounter problems with their vehicle.

A new bill seeking to reform the dealer franchise law has been raised again this year in the legislature’s Transportation Committee.

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