clock menu more-arrow no yes

Filed under:

Michigan latest state to ban direct Tesla sales

New, 127 comments

Michigan has become the latest state to ban Tesla from selling its cars straight to consumers, with Governor Rick Snyder signing a law yesterday that prohibits direct sales. Michigan joins a growing number of states that have banned or highly limited Tesla from opening and operating its own stores, generally at the pressure of dealerships that want to maintain their dominant market position and are threatened by manufacturer-owned stores. Dealerships say this protects consumers.

"No consumer unaffiliated with dealers would ever want this."

Many states already ban automakers from not using the dealership model, but Tesla's skirting of those rules has prompted new laws that further clamp down on the practice. The ban in Michigan is actually so thorough that Tesla says it is even prohibited from operating galleries within the state, which is what the automaker has done elsewhere so that it can at least present its cars and information on them.

Snyder says that Michigan isn't actually banning direct sales with this law, but that it's merely clarifying an existing law. "It doesn't change current law at all," Snyder says, "it merely strengthens existing language." While the law, like others, does not specifically mention Tesla, it's still no secret that Tesla is the impetus for its creation. The law was widely supported in the state's legislature, and General Motors, which is headquartered in Detroit, also voiced its support for the bill.

In a blog post after the bill passed, Tesla called the law "anti-competitive" and wrote that "no consumer unaffiliated with dealers would ever want this." Tesla has previously argued that its direct-to-consumers approach is necessary because of the novelty of its product, as consumers generally remain unfamiliar with electric vehicles.