Tesla To ‘Fight Hard’ For Its Sales Model In Michigan

Tesla To ‘Fight Hard’ For Its Sales Model In Michigan
Blomst / Pixabay

Tesla Motors is making preparations to “fight hard” with politicians and dealers to get approval for selling its vehicles directly in Michigan. A Tesla executive said the state does not even allow Tesla to service its vehicles there, which is “just incredible,” considering the free market and Michigan’s car culture.

Gov. Snyder blocked direct sales model

On Tuesday at a meeting of industry insiders, Tesla’s vice president of business development, Diarmuid O’Connell, told reporters, “We’ve got a rabid fan base here who are buying cars everywhere else in the U.S. and bringing them here, having them drop-shipped here.

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In October, the Palo Alto-based firm was blocked by Gov. Rick Snyder, who approved a bill banning automakers from bypassing the traditional dealership structure. The bill did away with the clause which was used by Tesla to operate company-owned retail stores in other states. The earlier law forbids car makers from selling their cars directly to retail customers except through ifranchised dealers. The updated bill from Snyder removed the word “its,” says a report from Detroit News. Tesla claims the removal of the word was specifically aimed at it because it doesn’t have any dealerships.

Last year, Snyder requested that the legislature take up the bill for the auto sales model during the 2015-16 session. However, a few FTC staff members urged the Michigan legislature to reconsider the ban, which according to them leads to “protectionism” for dealers and is also not in the interest of customers.

Tesla OK with a few stores

O’Connell said that during his trip to Michigan, he is having discussions with dealers, automakers, legislators and officials to present a strong case for Tesla. The executive said the company wants to invest in the state, and it already works with over 50 Michigan-based suppliers.

O’Connell notes that dealers and even car makers see Tesla and its sales model as a threat. “GM has entered into a lot of the state legislative fights that we’ve had to basically cap or prevent us from operating,” the executive said. In a statement, General Motors said that though they welcome all competitors, they want all players to follow the same rules.

O’Connell informed reporters that the company is considering few proposals for Michigan that have worked in other states where dealers and/ or GM are concerned that its sales model would “change the world.” O’Connell said as a compromise, Tesla would be happy if it is allowed to open five to ten stores in the state.

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