Tesla Michigan

Tesla’s battle to sell its vehicles and serve its existing customers directly in Michigan took an absurd turn last week. Tesla has been trying to open a store and service center in Michigan for the better part of the last 3 years, but it hasn’t been able to get around state laws, which is why it sued the state earlier this year.

Responding to the lawsuit last week, the state claimed that Tesla hasn’t tried to sell its cars directly in the state – something illegal under state law in Michigan and the reason why the company is suing the state.
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Michigan is the home state of the Big Three automakers and the most populated state in the US that still doesn’t have a Tesla store or service center. For that, you can thank a law backed by GM and local dealerships that prohibit automakers from operating car dealers in the state.

Tesla has been trying to open a store and service center in Michigan for the better part of the last 3 years, but it wasn’t able to get around the law, which is why it sued the state earlier this year. While the case is in court, Tesla went ahead and opened a showroom in Troy yesterday – something that pushes the boundaries of Michigan’s direct sales law.
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Last week, we reported on Tesla filing a lawsuit against Michigan Governor Rick Snyder and other state officials over the ban on direct car sales from automakers to consumers. The suit was filed after the Secretary of State denied Tesla’s application for a dealer license due to a law preventing an automaker from operating a car dealership.

Tesla claims that the law “violates the Due Process, Equal Protection, and Commerce Clauses of the Constitution”.

Gov Snyder commented on the situation for the first time this week and while he says that he is open to working with Tesla, he insists that they have to go through dealerships, which is really the only matter at hand in this situation.
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After months at a standstill at the Michigan Secretary of State office, Tesla’s application for a dealership license in order to service and sales its vehicles in the state was rejected earlier this month.

Electrek has learned today that Tesla filed a lawsuit against the state in order “to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla-owned facilities in the State of Michigan”.
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Michigan is the most populated state in the US that still doesn’t have a Tesla store or service center. It’s not because Tesla doesn’t want to open one. The company has plans to open a location in Detroit for over 2 years now, but the state direct sales law is banning the automaker from operating a store without going through a third-party dealer.

Again this week, Tesla lost another battle in the state as the Michigan Secretary of State upheld a decision to again deny a dealer license to the automaker for the Detroit store.
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After the update on Tesla’s challenge of direct sales law in the Utah Supreme Court earlier this week, we have another development in Tesla’s fight to sell its vehicles directly to consumers. In order to promote a new legislation to allow Tesla to sell its vehicles without having to go through third-party dealerships, as the law forces automakers to do in Michigan, Tesla owners are giving test drives circumventing the ban.
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Tesla first applied for a car dealership and repair license in Michigan over 6 months ago. The automaker reapplied again 3 months ago and the license still hasn’t been approved and the application is at a standstill at the Secretary of State’s Office.

The company appears to be at an impasse, Detroit News reports:

“In the most recent development, the Secretary of State’s Office put the automaker’s applications for dealership and service facilities at a standstill by requesting two weeks ago that the applicant submit proof it is a franchised dealer. If it doesn’t, the state will not rule on Tesla’s applications.”

The word “franchise” is the problem here. The application was made by the company and the state is aware of it. While a new bill that would allow Tesla to own a car dealership in the state has been proposed, the company didn’t have a good experience with the legislative process in Michigan before and it is now considering to bring the matter to the courts.
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