According to the LA Times, California’s New Car Dealers Association is asking the California DMV to investigate Tesla’s advertising¬†practices. The dealers allege that the automaker is crossing state and federal law, and is literally a case of false advertising.


The false advertising in question? Tesla’s website, which features a ‘cost calculator’ to help consumers figure out how much the Tesla ‘costs’ them per month to own.

And to be fair, the dealers have a pretty good point.

Tesla has an area that encourages you to deduct the costs you won’t be paying in fuel every month, and also an area that takes into account any state and federal tax credits. That’s fair. In fact, while most electric cars have the tax credits factored into their price on manufacturer and dealer sites, the great edge they have is the ability to save on gas. Helping people realize that they should factor in hundreds of dollars a month less in gas costs is an important part of accounting for how much an electric vehicle really costs. More manufacturers should do it, as it allows more of an apples to apples comparison of new vehicle costs.

That being said, Tesla then takes this all many steps further than just helping you realize how much the tax credits and lack of gas costs can help you. The Tesla site features cost ‘savings’ from its ‘guaranteed resale value,’ and time spent in carpool lanes and not having to be at the gas station.

As the dealers in the LA Times point out, if you click every box, the Tesla goes from being upwards of a $900/month car to finance to a little over $100.

Let’s be real. The Tesla is not cheaper to drive than a Chevy Aveo.

Tesla’s smart to try and point out to customers that savings in gas will help the bottom line every month. But Tesla isn’t competing with customers trying to find a $199/month car. They’re competing with Mercedes, BMW and other luxury cars. If they refocus their site on just the savings from not using gas, they’ll have a stronger argument and not fall afoul of legal challenges over false advertising.

Because the California dealers aren’t attacking the Tesla for fear of poor customers being led astray. They’re hoping to hobble Tesla’s ability to sell cars directly, something they oppose. This gives them a chance to make a legal challenge. If Tesla wants to win the long term battle, they’ll want to focus on staying in the game and not giving the dealer’s association ammunition.