Tesla Motors Inc Seeking Michigan Dealership License

Tesla Motors Inc Seeking Michigan Dealership License
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Tesla intends to sell and service its luxury vehicles in Michigan, for which it has applied for a license. This comes despite the fact that Gov. Rick Snyder signed legislation late 2014 that bans the company’s business model of directly selling cars to customers.

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Decision awaited

In November, the EV firm submitted applications to the Michigan Secretary of State’s Office and in recent weeks submitted follow-up information. The department is currently reviewing the applications, and in the next month or two, it will make a decision, according to agency spokesman Fred Woodham.

Woodham declined to comment when asked about what additional information the office requested, saying it is not uncommon during the application review process. Tesla intends to sell new and used cars, for which it needs a Class A dealership license.

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In an email to The Detroit News on Sunday, Woodham said the classification requires the company to have a repair facility or have a partnership with a licensed repair facility. If the applications are approved by the secretary of state, then Tesla will be permitted to begin selling and buying vehicles, provided it has taken care of the required local business permits.

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On Monday, Tesla confirmed that it had submitted the applications.

“Submission of the application is intended to seek the Secretary of State’s confirmation of this prohibition,” the Palo Alto, California-based automaker told The Detroit News. “Once confirmed, Tesla will review any options available to overturn this anti-consumer law.”

Michigan Information & Research Service, which was the first to report the applications, said that based on those applications, Tesla was allowed to contract with anyone except itself to sell its cars. And according to the Lansing-based capital news service, the company may send one of its ex-employees to open a Tesla dealership with a franchise agreement, “in which it mandates the dealership look, act and do business exactly as the Tesla-run stores.”

It was not clear as of Sunday night who within Tesla had submitted the applications. It could be CEO Elon Musk, Chief Financial Officer Deepak Ahuja or any another executive. The EV firm is scheduled to release its fourth-quarter and 2015 earnings results on Feb. 10, and additional information is expected to come then.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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