Michigan's Republican governor signed legislation on Tuesday that officially bans
But Rick Snyder, who is seeking re-election next month, maintained in a letter to lawmakers that the bill simply clarified the state's existing law and that such direct sales already were not legal in Michigan, home to Detroit's big auto companies.
Now, state law requires that Tesla, or other car companies, must sell vehicles through networks of franchised dealers. If the company doesn't have its own network, the state requires it to sell vehicles through another car company's dealership network.
The situation is somewhat moot for Tesla, which does not have a sales outlet in Michigan. The closest Tesla showroom is in Columbus, Ohio, about a four hour drive from Ann Arbor, where Snyder lives.
However, it's yet another setback for Tesla in its struggle to sell cars directly to consumers. It has lost battles with states such as Texas and North Carolina, although it recently was given the right to sell directly to consumers in Nevada, home of its upcoming Gigafactory.
And, it actually hadn't anticipated that it would have a fight on its hands in Michigan until a last-minute amendment was put on a bill dealing with transaction fees for dealers.
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On his website, Snyder said there had been a misunderstanding about the Tesla situation. “This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan – because this is already prohibited under Michigan law,” Snyder said in the letter to lawmakers
Snyder said lawmakers can and should discuss the existing dealership model to determine if it is best for the state’s consumers.
“We should always be willing to re-examine our business and regulatory practices with an eye toward improving the customer experience for our citizens and doing things in a more efficient and less costly fashion,” he said.
His statement was accompanied by a video discussing the decision.
Of course, given the clout that the state's car companies and auto dealers have with lawmakers, it is unlikely that the decision could be reversed, barring some sort of gesture to the state by Tesla's billionaire founder, Elon Musk. And, Musk has already committed $4 billion to $5 billion to Nevada, so something that grand isn't likely to be in the offing any time soon.
Although Michigan isn't a big market for Tesla, the company has aggressive growth plans over the next five years. So, the loss of any state market means a customer group that Tesla can't easily reach.
Last week, in a blog post entitled "A Raw Deal In Michigan," the company said the state's auto dealers "seek to force Tesla, a company that has never had a franchise dealership, into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers. In so doing, they create an effective prohibition against Tesla opening a store in Michigan."
It likened the action to "backroom" efforts in New Jersey and Missouri to keep Tesla from marketing its cars in their states and claimed "no consumer unaffiliated with dealers would ever want this."
Now, Tesla's potential customers in Michigan, like those in other states where the company's direct sales are banned, will continue to have to figure out ways to purchase and drive home their electric cars.
