The Delaware Supreme Court could influence whether new Teslas can be sold within the state, depending on how it rules in the company’s case against the DMV that was argued Wednesday.

The DMV, represented at the hearing by Deputy Attorney General George Lees, previously rejected Tesla’s application for a dealer’s license and claimed the Motor Vehicle Franchising Practice Act doesn’t allow a manufacturer to sell cars directly to consumers. But Wilmer Cutler Pickering Hale and Dorr partner Ari Holtzblatt argued that law is intended to prevent competition between manufacturers and their own franchises, which Tesla doesn’t have in Delaware.

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