Michigan Denies Tesla's Application For A Dealer License

[William Maley]

In news that will likely not shock anyone, Michigan's Secretary of State office has official denied Tesla a dealership license to sell vehicles in the state. The ruling issued last week follows a hearing earlier this month to review Michigan's initial motion to deny Tesla's request for a license, submitted last November.

“The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles. Tesla has told the department it does not have one, and cannot comply with that requirement,” said Michigan Department of State Communications Director Gisgie Dávila Gendreau in an email to The Detroit News.

This is due to a state law signed in 2014 which states,  “a vehicle manufacturer shall not … sell any new motor vehicle directly to a retail customer other than through franchised dealers.”

Tesla has been fighting tooth and nail to sell their vehicles in Michigan for a few years now by lobbying and applying for a license.  As Automotive News notes, Michigan is the most populated state that doesn't have a Tesla gallery or store. 

"At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state. As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers," Tesla said in a statement to Automotive News.

Now people outside of Tesla have been trying to change the law. As we reported back in February, a 22-year launched a petition to repeal this law. Also, Rep. Aaron Miller, R-Sturgis introduced a bill into the state's legislature to allow companies like Tesla to do direct sales. But as The Detroit News reports, the bill has sat stagnant.

“The discussion’s not over but for this session I think we’ve reached that point of no progress. I think the clock is going to run out on us,” said Miller.

Now it should be stated that anyone from Michigan who wants to order a Tesla can do so from the company's website. You'll have to pickup your vehicle outside of the state however, the closest ones being in Ohio.

Where does Tesla go next? That is anyone's guess at the moment. But as Tesla's general counsel Todd Maron said back in May, the company would either go to court or the legislation to make the change. Our hunch is Tesla will be going for the former.

Source: Automotive News (Subscription Required), The Detroit News

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[A Horse With No Name]

Protectionism is often not healthy for an economy, this just sucks, actually.

[Drew Dowdell]

I applaud Tesla for taking on the dealership network sponsored laws.  They are anti-competitive. 

[A Horse With No Name]

6 minutes ago, Drew Dowdell said:

I applaud Tesla for taking on the dealership network sponsored laws.  They are anti-competitive. 

They are doing quite a bit of good, actually.

[smk4565]

The dealership laws are mostly pretty bad.  The idea that a company can't sell direct so we can protect another business line removes competition which isn't good.  

Tesla will still cars online and get people to drive a couple hours to pick it up.  GM and Ford and their dealers are scared, if they weren't they wouldn't care, but hat 1950s and 1960s thinking of protect Detroit and keep all other completion out thinking still exists.  Instead of seeking government protection how about spend those lobbying dollars on building better cars.

[G. David Felt]

Sad, this is one area that is as stated, so out dated. Anyone should be able to sell direct if they want too.

[smk4565]

This reminds me of when Tucker tried to get up and running in the late 40s.  (which is a good movie by the way)  The Big 3 did everything they could to pressure lawmakers to block Tucker at ever turn, and Tuckers car was at least a decade ahead of what any of the Big 3.  They got their protectionist laws back then, although it only delayed the inevitable until the 1970s when Toyota, Honda, Mercedes, etc came to the USA and cleaned their clock.

[A Horse With No Name]

18 hours ago, dfelt said:

Sad, this is one area that is as stated, so out dated. Anyone should be able to sell direct if they want too.

Agreed.  We need to increase liberty in America, not decrease it.

14 hours ago, smk4565 said:

This reminds me of when Tucker tried to get up and running in the late 40s.  (which is a good movie by the way)  The Big 3 did everything they could to pressure lawmakers to block Tucker at ever turn, and Tuckers car was at least a decade ahead of what any of the Big 3.  They got their protectionist laws back then, although it only delayed the inevitable until the 1970s when Toyota, Honda, Mercedes, etc came to the USA and cleaned their clock.

We have learned very little in almost 70 years.  And in a lot of ways, not just automotive marketing.