Michigan Car Dealers Slip One Over On Tesla, Ban Direct Sales: UPDATED


Tesla Store  -  Portland OR

Tesla Store - Portland OR

Enlarge Photo

Tesla Motors and its supporters have rallied numerous times against attacks on the electric-car maker's company-owned stores, but a Michigan bill banning its online direct-sales model has made it into law--almost.

HB 5606 was passed early this month by the state legislature, with late language added that prevents Tesla from selling cars directly to consumers in the home state of the three U.S. carmakers.

ALSO SEE: Dumb Laws From States Banning Tesla Sales

Michigan Governor Rick Snyder has less than a week, until October 21, to sign the bill into law.

[UPDATE: Very late on Thursday, October 16, Tesla published a blog post on the Michigan legislation, highlighting the appearance of conflict between the legislator who altered the bill at the last minute. State Senator Joe Hune, who has received campaign contributions from the Michigan Automobile Dealers Assocation, is the architect of the late edits. His wife's firm lobbies for those same dealers. The blog post urges Tesla advocates to contact Governor Synder's office and includes contact information.]

The loss for Tesla resulted from minor changes to the bill's language, swiftly implemented without any opportunity for public comment.

Tesla Store - Portland OR

Tesla Store - Portland OR

Enlarge Photo
HB 5606 was originally intended to offer added protection to franchised dealers and consumers from price gouging by carmakers, and was passed by the Michigan House in September without any anti-Tesla language.

However, in the Senate, any wording that might imply the legality of a manufacturer-owned dealership was removed.

For example, the phrase "manufacturer's new motor vehicle dealers" found in the original House version was changed to "franchised dealers."

The modified version of the bill was passed unanimously by the Senate October 2, and then sent back to the House later the same day, where it passed with only a single dissenting vote.

Tesla Store - Portland OR

Tesla Store - Portland OR

Enlarge Photo
Tesla regulatory chief James Chen told The Wall Street Journal last week that the carmaker will fight this legislation, saying he has met with state officials in Lansing. Anti-Tesla legislation has already been defeated in Massachusetts, Minnesota, and New York. Nevada explicitly legalized Tesla's company-owned stores as part of the incentives package lawmakers created to land the carmaker's massive battery Gigafactory.

If Gov. Snyder signs the bill, Michigan will join Arizona, Texas, and Virginia in banning direct sales entirely.

Tesla is limited to one location in Colorado, and legislation that would decide the fate of two stores in New Jersey is still pending.

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