Factory direct sales now (more) illegal in Michigan

Typically, when a state either makes it legal or illegal for Tesla to sell their vehicles directly to customers, we skip the story. But, when the state is Michigan and GM is involved from a corporate level, we tend to get a bit more interested.

Today, Michigan Governor Rick Snyder signed into law House Bill 5606, reinforcing a current law that makes it illegal for Tesla to operate as a direct seller in the mitten state. It’s said the bill was a bipartisan effort, triggered by the state’s dealers.

In most US states, franchise laws bar automakers from opening up stores and competing with dealers that may sell the same vehicles.

While GM could possibly benefit from owning their own dealerships, their approach has basically been a case of ‘if we can’t do it, neither can Tesla.’ Also, fighting with dealer bodies is not something the General would like to do right now as they look for help to rebuild Cadillac.

From General Motors:

We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan; therefore, we encourage Governor Snyder to sign it.

From Tesla:

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.


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