.

the car junkie daily magazine.

.

Michigan Signs Bill Into Law Reinforcing Ban On Direct Vehicle Sales. GM celebrates, Tesla Left In The Cold


Michigan Signs Bill Into Law Reinforcing Ban On Direct Vehicle Sales. GM celebrates, Tesla Left In The Cold

Governor Rick Snyder put his signature on H.B. 5606 into law on October 21, 2014, as reported on Jalopnik. What does that mean? In short, the bill restates that it is against Michigan state law for a vehicle manufacturer to sell directly to the consumer. And who does that slam the door on? Yup, you guessed it, Elon Musk and Tesla Motors. Now, this isn’t that big of a shock: selling directly to consumers has been illegal in Michigan for quite some time. What is a surprise is the change: the word “its” was removed from a sentence of the prior law; this means that Michigan opened up the door to allow Tesla the opportunity to align with an existing dealership network and sell through them. As you can probably guess, this news did not go over well with Tesla Motors. Per their response (which you can read here):

“This amendment goes even further. It also seeks to prevent Tesla from operating a gallery in Michigan that simply provides information without conducting sales. We could even be barred from telling people about our car.

This anti-competitive behavior mirrors similar tactics in New Jersey and Missouri, where dealers have resorted to backroom political maneuvers to shore up their monopolies. The dark-of-night tactics highlight the dealers’ concerns that their arguments don’t stand up well to public scrutiny.

General Motors hasn’t been the least bit shy about their support of H.B. 5606. Per a statement that was released on their media page:

“We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan.

Considering GM’s open support, as well as the support of a dealer’s lobby, you can bet Tesla had another response ready for that as well:

What’s good for GM’s customers is not necessarily good for Tesla’s customers. What’s good for gasoline cars is not necessarily good for electric cars. Tesla is selling a new product with a new technology. The evidence is overwhelming that a traditional dealer-based approach does not work for electric cars. Moreover, GM distorts the purpose of the franchise laws (including in Michigan), which are in place not to cement a monopoly for franchised dealers but rather to prevent companies with existing franchises from unfairly competing against them. Tesla has never used franchised dealers, so these concerns are simply irrelevant. It’s only through the last-minute amendment to HB 5606 that Michigan law would be distorted into something entirely different.”

Meanwhile, Gov. Snyder released a response video:


  • Share This
  • Pinterest
  • 0

13 thoughts on “Michigan Signs Bill Into Law Reinforcing Ban On Direct Vehicle Sales. GM celebrates, Tesla Left In The Cold

  1. BeaverMartin

    As a mild libertarian I’m opposed to this sort of government intervention (though I did support the bail-out). Perhaps the big 3 could learn something from the direct sales model. Imagine if you could go in a showroom, customize your ride and have it delivered, instead of being pressured to buy whats on the lot cause they haven’t sold all of the leftover impalas yet. It would be really cool if you could select the drive train you want like in big trucks. Mustang with a hellcat hemi, Silverado with a Cummins, that would be awesome!

  2. BeaverMartin

    Brain flash! Tesla should buy the AMC name from FCA and reestablish an AMC dealer network. Wouldn’t happen in a million years, but would make me happy.

  3. john

    Good going Michigan!!! Just like my good old NJ, you’ve stopped Tesla in its tracks. I don’t know how the big auto producers would have continued to compete against the “Musk Monster ” with it’s yearly sales measuring in the hundreds. How dare they try to sell their cars directly to the consumers avoiding the countless middlemen with greedy hands rifling our pockets. Politicians, you’ve driven Tesla out of my NJ and now MI so sleep well tonight YOU F’in BASTARDS. 🙂

  4. bkbridges

    This could start a wave of Tesla tourism! Fly in to Washington (CA, AZ etc.) and drive home to MI NJ etc. in a new Tesla! Spend your dollars in another state that will let you buy a Tesla, and hang out for a while enjoying the sites. Might be a slow trip home at 250miles per charge though. Take your time…

  5. Chuck

    I was in a tesla dealership in miami and the salesman wouldn’t have pissed on me if I was on fire. Guess I didn’t have the lawyer look? I don’t feel sorry for Elon and the boys.

  6. John T

    OK, maybe people have an agenda here because they don’t like Tesla…don’t really get that, but park that to one side for a tick….the government wont let a manufacturer sell what they make to consumers? what the actual f is that all about???????????? this is in the US, land of the free etc….if I was making something and somebody said to me ` that’s cool – can you sell me one? ‘ the LAST thing I want is some bureaucrat jumping in saying ` nah, we have a rule against that’.

    (Edited by Brian: Dialed back the language)

  7. raymond Hughes

    Only in the united states of america would an american state oass a law ti stop the sale of an american product to american people… What a joke

Comments are closed.