Tesla starts deliveries in Big 3’s backyard after years of fighting

Tesla has started deliveries in Michigan this week after years of fighting over the right to sell and service its electric cars in the backyard of the Big Three (GM, Ford, and Chrysler).

Michigan has been a battleground for Tesla.

There are several states where Tesla has been banned from selling its vehicles directly to customers due to misused old laws meant to protect car dealers, but Michigan has stood out among those states.

It is the home turf of the auto industry in the US, and some of those automakers are rumored to have been involved trying to stop Tesla to sell in Michigan.

A change to the law in 2014 prohibited direct sales from automakers, which is blocking Tesla from obtaining a dealership license and selling cars in the state.

After trying to change things at the legislative level in 2016, Tesla filed a lawsuit against the state, claiming that the ban on direct sales violates commerce laws, and that it was pushed by car dealers and GM in an attempt to block the electric automaker at the last hour.

It has since been a long legal process, during which Tesla tried to prove that lawmakers were influenced by car dealers to specifically prevent Tesla to sell vehicles direct to consumers in the state.

Earlier this year, Tesla reached a settlement with the state of Michigan to allow direct sales and service of vehicles through some official loopholes.

They didn’t officially allow Tesla to get a dealer license, but they are allowing Tesla to sell and service to customers in Michigan through legal loopholes, like registering cars from another state for deliveries and having a wholly owned subsidiary perform service.

Now sources familiar with the matter told Electrek that Tesla officially started deliveries in Michigan.

It’s a special milestone for Tesla who has been kept away from the home state of the US auto industry.

Sources tell Electrek that the process to deliver in Michigan is similar to the few other states where Tesla is not officially allowed to sell directly to customers, like Texas.

The buying process is handled through Tesla’s inside sale team in Las Vegas, but unlike prior to the settlement, customers are now able to pick up their cars at Tesla’s locations in Michigan:

Despite the ban, Tesla has many customers in Michigan who were picking up their cars in Ohio, but the biggest issue was service.

Michigan was prohibiting Tesla to service its vehicles in the state, which hasn’t been the case in other markets where Tesla is not allowed to sell directly, like in Texas.

Now new and existing Tesla owners are able to get service from Tesla’s service center outside of Detroit and through its mobile service fleet.

A source told Electrek that Tesla plans to deliver a few hundred vehicles in the state by the end of the month.

Electrek’s Take

It’s a proud day for Tesla. They are finally delivering electric cars in the big three’s backyard.

While GM, Ford, and Chrysler are called the big three of the automotive business, Tesla is now more valuable than all of them, and in many people’s minds, the California-based automaker represents the future of the US auto industry.

It’s still weird that they can’t operate under a normal dealer license and that the state openly created loopholes for them, but it’s still a better situation than before the settlement — similar to how Tesla operates in Texas.

A small victory, but it’s symbolic that established automakers are not able to stop the progress anymore. They are going to have to adapt.