Michigan was one of Tesla's most emphatic critics of using online trading without traditional franchise dealers. The domestic automakers felt that it would be unfair to give Tesla so much control over their retail business, while any other automaker follows the laws of dealership franchises.
Tesla was forbidden to sell their vehicles directly to consumers or to service any of their vehicles in Michigan. In October 2014, Rick Snyder signed a bill banning direct sales of new cars. The big three automakers including Ford, GM and Fiat Chrysler United States subsidiary, all headquartered in Michigan, were reported to have lobbied for the 2014 law that restricts Tesla's ability to sell in the state.
Tesla customers in Michigan are forced to travel to Cleveland, Columbus, and even to Chicago to deliver their cars or service them. To meet demand in Michigan, the automaker opened a service center in Toledo, which was part of the desire of CEO Elon Musk to expand its Tesla service network.
According to Detroit News, AP, Bloomberg, and other sources, Michigan residents can now deliver Tesla cars to their home state. The automaker and state have reportedly reached an agreement that puts an end to a lawsuit challenging Michigan’s ban on direct sales of cars. Tesla filed a lawsuit in 2016 after several years of trying to change state legislation that allows car manufacturers to sell cars only through dealerships for franchises.
Although neither side has confirmed anything yet, Tesla CEO Elon Musk responded with an enthusiastic “Yay!” to the Detroit News report on development.
Yay!
— Elon Musk (@elonmusk) January 21, 2020
Based on information from publications, Tesla will now be allowed to deliver vehicles to Michigan through a subsidiary - buyers will no longer have to pick up their orders in another state. There is only a small catch: under terms of the settlement, Tesla would be allowed to deliver vehicles in Michigan so long as they are first titled outside the state. A Michigan owner could then get the title switched to Michigan.
However, customers will no longer have to travel elsewhere to service their cars, now that the company can open service centers in its state. In addition, Tesla sales representatives can now help with sales at gallery locations. Currently, employees of the gallery, which works in the Detroit mall, cannot talk about vehicle prices and rental conditions. It is expected that the agreement will be announced today.
Featured image: Tesmanian
About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
