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Michigan bill may end Tesla’s direct-to-customer sales


Some Michigan lawmakers are attempting to put a halt to Tesla’s direct-to-customer sales, which bypass a traditional franchised dealer network. Since January, when the state of Michigan settled with the EV maker, Tesla has been able to operate its own sales and service centers in the state, something that other automakers have been prohibited from doing. Before that, Tesla owners had to take their cars to neighboring Ohio or Illinois for service.

According to the Detroit News, the newly written House Bill 6233 would have preserved Tesla’s dispensation and codified it into law, but on Wednesday night Republican legislators amended the bill to specifically eliminate the sections protecting Tesla.

Democrat Christine Greig, reports Detroit News, offered an alternative allowing a certain number of licenses to be granted to EV makers. That would have provided allowances for Rivian, which is headquartered in Michigan and is not part of Tesla’s settlement exemption. However, her substitute was struck down. 

“It opens up the state to additional litigation, which costs taxpayer dollars. And it also is a very anti-market approach to vehicle sales,” Greig told the Detroit News.

Tesla has been embroiled in separate legal battles with most of the 50 states to offer direct-to-customer sales. The company’s position is that it would be extremely difficult to properly train non-company dealer staff, especially when it comes to intricacies and benefits of its electric vehicles. Meanwhile, traditional dealerships see the OEM-to-customer sales model as a threat.

As a result, there’s a mosaic of state laws allowing Tesla to operate across the U.S. Some have granted Tesla exceptions to operate mostly unrestricted. Some have allowed showrooms but not repair centers. Some have a cap on the number of stores Tesla can open in the state. Others have an outright ban.

The Michigan bill now moves to state Senate. If it passes there, it will move to governor Gretchen Whitmer’s desk for final signature.

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