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Tesla, Rivian still face complicated direct sales laws across U.S. states
Executives from both Tesla and Rivian have commented on the decades-long fight to overturn direct vehicle sales bans across many U.S. states, reigniting a long-held conversation in the electric vehicle (EV) community about dealership policy lobbying groups and online sales models.
Tesla has managed to side-step direct sales bans in many states through legal loopholes such as leasing-only models, processing purchases as out-of-state transactions, or simply opening stores in exempted tribal territories where the company’s stores will be exempt from dealership mandates. In other states, the company is still completely prohibited from selling vehicles, such as in Louisiana, where a U.S. appeals court just upheld Tesla’s right to sue the state over the direct-sales ban in August.
In Connecticut last July, Tesla managed to open a store on sovereign Mohegan tribal land, effectively side-stepping the U.S. state’s ability to prohibit direct sales. The Connecticut Automotive Retailers Association (CARA), a dealership lobbying group, immediately spoke out against the decision, though it gained support from Governor Ned Lamont.
Elsewhere, Tesla, Rivian, and many others sporting a direct sales model also face state store limits, and some executives have recently highlighted the decades-long fight to overturn these kinds of laws.
Other states have bans on service centers, storefronts, or both, while some only allow Tesla to sell vehicles online, though they must make deliveries through a service center. The latter includes Texas, where Tesla’s headquarters is located and where it operates a U.S. Gigafactory. As for Rivian, it faces a similar situation through its Seattle retail “Space,” since company representatives are prohibited from sharing specific details on prices or receiving orders.
As such, the state-to-state laws can be difficult for EV companies like Tesla and Rivian to wade through and operate under, so it shouldn’t come as much of a surprise when they point to dealership lobbying practices that keep them in place as being bad—or to their local teams who are working on overdrive.
Rivian CEO on state-to-state dealership laws
In a report published on Thursday, Rivian CEO RJ Scaringe said that dealership franchise laws were “as close as you can get to corruption,” as stated during a discussion with InsideEVs about whether Rivian’s recent Volkswagen partnership could let the startup work through VW dealerships. The report has reignited long-held discussions about states where Tesla, Rivian, and others aren’t allowed to operate—and seemingly due to powerful lobbying from dealership groups.
“Unfortunately, in the United States, it’s not an easy question,” Scaringe said as to the proposition of selling through VW’s dealers. “We have this horrific state-by-state level of rules that are as close as you can get to corruption.
“I think you essentially have, like, lots of dealers have paid for laws that make it really hard for us to interact directly with the consumer,” the Rivian CEO adds.
RELATED: Tesla granted license for direct vehicle sales in Kentucky
Tesla VP of Finance on state-to-state dealership laws
As a follow-up to the story, Tesla VP of Finance Sendil Palani shared his thoughts in a post on Saturday, praising the company’s local teams in states where direct sales are actively banned:
Tesla has been pursuing the direct-to-consumer model for two decades, and it has been an enormous challenge to pursue what we believe is the best model for customers.
I spent a portion of this past week visiting our Northeast region, and was reminded about how these laws are among our most prominent challenge for Sales and Delivery. Local teams make a heroic effort across the entire customer journey: from allowing customers to learn about our product at non-licensed locations while observing restrictions on sales activities, to managing a large flow of deliveries through a small number of licensed locations, to ensuring that we can properly perform vehicle registration paperwork for multiple states and customer circumstances at each licensed location.
Our customers have to make heroic efforts of their own, from traveling long distances to pick up their vehicle to patiently enduring any kinks in the process.
Sadly, this is common throughout much of the country, resulting in higher costs and a worse customer experience for the affected regions.
U.S. states with bans on direct sales models like at Tesla, Rivian
- Alabama (includes service centers)
- Arkansas
- Connecticut (leasing is allowed; tribal land loophole)
- Iowa
- Kansas (includes storefronts)
- Kentucky
- Louisiana (Tesla allowed through special license, “service center” model)
- Nebraska
- New Mexico (includes service centers; tribal land loophole)
- Oklahoma
- South Carolina (includes service centers)
- Texas (Tesla sells through online loophole, “service center” model)
- West Virginia (includes storefronts)
- Wisconsin
U.S. states with store limits on direct sales models like at Tesla, Rivian
- Illinois (limited to 13)
- Maryland (limited to 4)
- Mississippi (limited to 1)
- New Jersey (limited to 4)
- New York (limited to 5)
- North Carolina (limited to 6)
- Ohio (limited to 3)
- Pennsylvania (limited to 5)
- Virginia (limited to 5)
What are your thoughts? Did I miss anything, or do you have a story or opinion to share regarding direct auto sales? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.
DOJ echoes Tesla argument in Louisiana direct sales appeal
Elon Musk
Starlink passes 9 million active customers just weeks after hitting 8 million
The milestone highlights the accelerating growth of Starlink, which has now been adding over 20,000 new users per day.
SpaceX’s Starlink satellite internet service has continued its rapid global expansion, surpassing 9 million active customers just weeks after crossing the 8 million mark.
The milestone highlights the accelerating growth of Starlink, which has now been adding over 20,000 new users per day.
9 million customers
In a post on X, SpaceX stated that Starlink now serves over 9 million active users across 155 countries, territories, and markets. The company reached 8 million customers in early November, meaning it added roughly 1 million subscribers in under seven weeks, or about 21,275 new users on average per day.
“Starlink is connecting more than 9M active customers with high-speed internet across 155 countries, territories, and many other markets,” Starlink wrote in a post on its official X account. SpaceX President Gwynne Shotwell also celebrated the milestone on X. “A huge thank you to all of our customers and congrats to the Starlink team for such an incredible product,” she wrote.
That growth rate reflects both rising demand for broadband in underserved regions and Starlink’s expanding satellite constellation, which now includes more than 9,000 low-Earth-orbit satellites designed to deliver high-speed, low-latency internet worldwide.
Starlink’s momentum
Starlink’s momentum has been building up. SpaceX reported 4.6 million Starlink customers in December 2024, followed by 7 million by August 2025, and 8 million customers in November. Independent data also suggests Starlink usage is rising sharply, with Cloudflare reporting that global web traffic from Starlink users more than doubled in 2025, as noted in an Insider report.
Starlink’s momentum is increasingly tied to SpaceX’s broader financial outlook. Elon Musk has said the satellite network is “by far” the company’s largest revenue driver, and reports suggest SpaceX may be positioning itself for an initial public offering as soon as next year, with valuations estimated as high as $1.5 trillion. Musk has also suggested in the past that Starlink could have its own IPO in the future.
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NVIDIA Director of Robotics: Tesla FSD v14 is the first AI to pass the “Physical Turing Test”
After testing FSD v14, Fan stated that his experience with FSD felt magical at first, but it soon started to feel like a routine.
NVIDIA Director of Robotics Jim Fan has praised Tesla’s Full Self-Driving (Supervised) v14 as the first AI to pass what he described as a “Physical Turing Test.”
After testing FSD v14, Fan stated that his experience with FSD felt magical at first, but it soon started to feel like a routine. And just like smartphones today, removing it now would “actively hurt.”
Jim Fan’s hands-on FSD v14 impressions
Fan, a leading researcher in embodied AI who is currently solving Physical AI at NVIDIA and spearheading the company’s Project GR00T initiative, noted that he actually was late to the Tesla game. He was, however, one of the first to try out FSD v14.
“I was very late to own a Tesla but among the earliest to try out FSD v14. It’s perhaps the first time I experience an AI that passes the Physical Turing Test: after a long day at work, you press a button, lay back, and couldn’t tell if a neural net or a human drove you home,” Fan wrote in a post on X.
Fan added: “Despite knowing exactly how robot learning works, I still find it magical watching the steering wheel turn by itself. First it feels surreal, next it becomes routine. Then, like the smartphone, taking it away actively hurts. This is how humanity gets rewired and glued to god-like technologies.”
The Physical Turing Test
The original Turing Test was conceived by Alan Turing in 1950, and it was aimed at determining if a machine could exhibit behavior that is equivalent to or indistinguishable from a human. By focusing on text-based conversations, the original Turing Test set a high bar for natural language processing and machine learning.
This test has been passed by today’s large language models. However, the capability to converse in a humanlike manner is a completely different challenge from performing real-world problem-solving or physical interactions. Thus, Fan introduced the Physical Turing Test, which challenges AI systems to demonstrate intelligence through physical actions.
Based on Fan’s comments, Tesla has demonstrated these intelligent physical actions with FSD v14. Elon Musk agreed with the NVIDIA executive, stating in a post on X that with FSD v14, “you can sense the sentience maturing.” Musk also praised Tesla AI, calling it the best “real-world AI” today.
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Tesla AI team burns the Christmas midnight oil by releasing FSD v14.2.2.1
The update was released just a day after FSD v14.2.2 started rolling out to customers.
Tesla is burning the midnight oil this Christmas, with the Tesla AI team quietly rolling out Full Self-Driving (Supervised) v14.2.2.1 just a day after FSD v14.2.2 started rolling out to customers.
Tesla owner shares insights on FSD v14.2.2.1
Longtime Tesla owner and FSD tester @BLKMDL3 shared some insights following several drives with FSD v14.2.2.1 in rainy Los Angeles conditions with standing water and faded lane lines. He reported zero steering hesitation or stutter, confident lane changes, and maneuvers executed with precision that evoked the performance of Tesla’s driverless Robotaxis in Austin.
Parking performance impressed, with most spots nailed perfectly, including tight, sharp turns, in single attempts without shaky steering. One minor offset happened only due to another vehicle that was parked over the line, which FSD accommodated by a few extra inches. In rain that typically erases road markings, FSD visualized lanes and turn lines better than humans, positioning itself flawlessly when entering new streets as well.
“Took it up a dark, wet, and twisty canyon road up and down the hill tonight and it went very well as to be expected. Stayed centered in the lane, kept speed well and gives a confidence inspiring steering feel where it handles these curvy roads better than the majority of human drivers,” the Tesla owner wrote in a post on X.
Tesla’s FSD v14.2.2 update
Just a day before FSD v14.2.2.1’s release, Tesla rolled out FSD v14.2.2, which was focused on smoother real-world performance, better obstacle awareness, and precise end-of-trip routing. According to the update’s release notes, FSD v14.2.2 upgrades the vision encoder neural network with higher resolution features, enhancing detection of emergency vehicles, road obstacles, and human gestures.
New Arrival Options also allowed users to select preferred drop-off styles, such as Parking Lot, Street, Driveway, Parking Garage, or Curbside, with the navigation pin automatically adjusting to the ideal spot. Other refinements include pulling over for emergency vehicles, real-time vision-based detours for blocked roads, improved gate and debris handling, and Speed Profiles for customized driving styles.
Starlink passes 9 million active customers just weeks after hitting 8 million
NVIDIA Director of Robotics: Tesla FSD v14 is the first AI to pass the “Physical Turing Test”
