Tesla Motors Sales May Be Banned in Michigan

Tesla Motors

Tesla Motors, the company that pushed out all of the little, but high-tech, electric cars, may have its direct sales banned in the state of Michigan. The state, which use to be the thriving example for the automobile industry, is now working to ban direct sales to consumers in Michigan, of which Tesla Motors is the only one who does so. The company is stating that the state legislature put the bill in last-minute and that they were sneaky about the whole thing because they knew it would be hard to pass in a public debate. They also stated that the legislature is taking out fairness when it comes to the passing of the bill.

Tesla Motors does not have a company in the state of Michigan. Instead they sell in Michigan through dealers in the area, and galleries at malls and retail stores, while working out of their Columbus, Ohio office or their Palo Alto, CA headquarters. They sell to consumers as a manufacturing company, skipping the middle man. Sources say that dealers have tolerated companies that sell online but that they are outraged at CEO and co-founder of Tesla Motors, Elon Musk, who sells directly to customers from manufacturing, without having to go through franchised dealers, as everyone else does. The bill which was passed through legislature on Oct. 2, has now gone to Gov. Rick Snyder. Snyder has until Tuesday the 21st to decide whether to pass the bill barring sales of Tesla cars to dealers in Michigan.

According to social media, Snyder is running for re-election and upholding or vetoing the bill may hurt his upcoming run to be re-elected. However, sources have not confirmed whether or not that is why Snyder is putting off the issue. Sources say that the problem is that Snyder has boasted in the past about how hospitable he makes the state of Michigan for entrepreneurs.  Under the current law car dealers can not sell new motor vehicles directly to retail customers that are not through its franchised dealers of the brand unless they are non-profit, or a government agency that is local, state, or federal. The new law only took out the word “its” before franchised dealers, which is what would take Tesla Motors out of the running from direct sales in Michigan.

State officials are saying that the reason for this type of law is because of the laws in Michigan that dealers in the state have to abide by. They state that Tesla is not following the specific laws of the state because they do not have a company in the area. Other states have passed similar laws for these reasons, such as Texas, Arizona, and Virginia. New Jersey is also under the process of passing this type of bill and Colorado has a similar ban but limits a manufacturer to one location. If other states continue to follow, Tesla Motors may have to open up some new locations, designed specifically for selling cars.

If the state of Michigan does pass the bill, many consumers are saying that it won’t affect Tesla Motors much. According to sources most of the owners of a Tesla auto have driven to other states to purchase the car, as it is. If a consumer can not buy a Tesla brand automobile from Michigan they may continue to drive to other states in order to obtain the vehicle, anyway.

By Crystal Boulware

Sources:

USA Today
Forbes
Capital OTC

One Response to "Tesla Motors Sales May Be Banned in Michigan"

  1. Robert   October 21, 2014 at 6:16 am

    This is protectionism. Protectionism doesn’t work. It drives up consumer prices and limits choice. It supports lack of competition and lack of innovation. If Detroit wants to compete they need to do so by making competitive and innovative products that people want to buy.

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