Tesla Motors continues to fight for the ability to sell its electric cars directly to customers in Michigan, home of the rest of the U.S. auto industry.
The Silicon Valley automaker has been banned from doing so for about two years, thanks to subtle changes made to the state's franchise laws to prevent direct sales.
Having failed to overturn the ban, Tesla filed a federal lawsuit in September, alleging that the Michigan government's actions are unconstitutional.
The state denies these allegations, calling Tesla's interpretation of its laws "incorrect," reports The Detroit News.
In a response to the Tesla lawsuit, Michigan said the automaker would not have been able to implement its direct-sales model even before the October 2014 change to franchise laws.
Slight wording changes were enacted at that time to eliminate any interpretation that would have supported direct sales, and the entire process was done quietly, with little time allowed for public comment.
But the state of Michigan argues that the law preventing Tesla from selling cars to directly to customers dates back to 2000—before Tesla was founded.
Oddly, the state also said in its response that Tesla "has never sought the ability to directly sell its vehicles in Michigan but only licenses to operate dealerships."
However, the only way for an automaker to sell cars in Michigan is through franchised dealerships licensed by the state.
In a bid by the automaker to circumvent the direct-sales ban, a unit of Tesla did apply to become a Michigan dealership.
That application was denied in September by the Michigan Secretary of State's office.
"If it's the state's position that Tesla can sell its cars directly to customers, Tesla welcomes that opportunity," the automaker said in an email to The Detroit News.
Tesla gallery at Nordstrom
Tesla has also opened a "gallery"—where consumers can look at cars, but can't buy—at a shopping mall in Troy, Michigan earlier this month.
It is located on the first floor of the Nordstrom department store at the Somerset Collection mall.
Tesla has an agreement with Nordstrom to open small showroom spaces in the retailer's stores on a limited basis.
Shoppers who visit Tesla galleries and wish to purchase cars are directed to full retail stores or the company's website.