Direct sales of Tesla Motors in danger of being banned in Michigan

Michigan, ancestral homeland of the American car industry, could be just one more state where electric supercar manufacturer Tesla might not be welcome soon.

Tesla Motors, the California-based automaker that specializes in all-electric luxury and performance vehicles, has been fighting an uphill battle across the US because many states have regulations banning manufacturers from directly selling their vehicles to consumers. Instead automakers can only sell their vehicles through franchised dealerships. While Michigan doesn't currently have such a law on the books, there's a bill to that effect is sitting on Governor Rick Snyder's desk; he has until Tuesday to make his decision on the bill.

To Michigan's credit, the new bill doesn't name Tesla Motors or any other automaker by name. At the same time, industry experts point out that Tesla is the only automaker seeking to directly sell its vehicles to state residents. The language banning direct sales was a last-minute addition to a larger bill that dealt with standardizing car dealership documentation fees and has no other language referring to direct sales.

Diarmuid O'Connell, vice president of Tesla's business development division, said that the electric car manufacturer was completely taken by surprise by the last minute amendment. O'Connell disputed the secretive nature in which the amendment was added, remarking that it didn't leave Tesla an opportunity to respond or debate its inclusion.

This isn't the first time Tesla Motors has been frozen out of a state. Direct motor vehicle sales were banned in New Jersey earlier this year, and both Texas and Arizona have similar laws on the books at well. All of these states encountered heavy lobbying activity from dealership franchises; likewise the Michigan Automobile Dealers Association has not been shy about its own involvement in getting the amendment added to the bill waiting for Governor Snyder's signature.

The MADA says that there are frameworks in existing Michigan law that prohibits Tesla, or any other car manufacturer, from making direct sales within the state. Tesla Motors has disputed such a claim, and the lengths that the dealers association has gone in order to put an explicit law on the books supports Tesla's position.