Tesla Motors Inc (NASDAQ:TSLA) may soon be banned from selling its cars in another state. In Michigan, an anti-Tesla bill has already been passed by the state’s legislature and just requires a signature from Governor Rick Snyder to become law.
Governor has a few days to decide
“Many bills came over as the legislature finished the session, and the governor is doing due diligence by examining all of them,” said Dave Murray, deputy press secretary for Snyder, a Republican. The governor can still either sign or veto the bill, and he has until Oct. 21st to decide.
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Almost 16,000 new-car dealers are represented by the National Automobile Dealers Association, which supports the current franchised-dealer network system. In an e-mailed statement, spokesman Charles Cyrill said that the states have full right to protect the consumers by deciding on the method by which cars are sold. In a typical market, competition among local dealers benefits customers by driving down prices, but if a manufacturer owns all its stores then consumers will not be left with any bargaining power, said Cyrill.
Tesla surprised to see the bill
The Palo Alto, California-based company’s vice president of business development, Diarmuid O’Connell, who held a meeting with the governor, said that the company was surprised to see the bill this year in its current form. In a telephone interview with Bloomberg, he noted that the company was expecting a discussion in the legislature later over the issue.
“Dealers, under the cover of darkness, are foreclosing that debate, I can only assume because they don’t like their prospects in the public debate that we seek,” O’Connell added.
Michigan is a home to many big and well-established car companies including General Motors, Ford Motor Co. and the Chrysler Group. Detroit-based GM is the most popular automaker in the nation holding 17.8% of light-vehicle sales this year through September, according to data from Autodata Corp. Second place is held by Dearborn-based Ford with 15.1% market share. Toyota Motors, who is also an investor in Tesla, holds the third spot with 14.4% share while the fourth spot is bagged by the U.S. unit of Fiat Chrysler Automobiles NV with 12.5% market share. As per Autodata estimates Tesla holds only 0.1% of the market.
Tesla Motors Inc (NASDAQ:TSLA) has been battling with dealer groups in a number of states, including Georgia, Missouri, New Jersey, New York, Ohio and Pennsylvania.