Michigan May Ban Tesla Direct Sales Pending Governor's Signature

Cameron Aubernon
by Cameron Aubernon

Sitting on Michigan governor Rick Snyder’s desk is a bill that would add the state to the list of places where Tesla cannot sell its vehicles directly to the public, waiting for his pen to seal the deal.

Automotive News reports Michigan H.B. 5606 was originally meant to determine whether or not automakers could stop their dealership networks from charging consumers certain fees when it was introduced in May, only for the anti-Tesla language to be appended to the bill by the state senate prior to passage — and without notice or debate — during the first two days of October. The bill then returned to the state house, passing 106 to 1 before landing on Snyder’s desk.

On the third day, Tesla contacted the governor’s office to have “a very open and productive dialogue” with those in the Snyder administration, according to vice president of business development Diarmuid O’Connell. He added that the automaker had been watching the bill since its introduction, citing its experience with other bills where anti-Tesla language had been stealthily implemented.

Meanwhile, Michigan Automobile Dealers Association executive vice president Terry Burns applauded the bill, proclaiming that while Tesla are “more than welcome” to do business in Michigan, he would hope they do so based on state law:

One good thing about being governor, you get to do whatever you think is appropriate at the time. We hope and look forward to him signing the bill and clarifying the language, and we hope he does it soon.

As for when the governor would decide the fate of H.B. 5606, a representative said the bill was being evaluated, but nothing has been decided thus far. Snyder has until October 21 to sign.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Astigmatism Astigmatism on Oct 16, 2014

    Hey everyone, let's have fun with Rick Snyder quotes! "We create the environment, the playing field for success, and let free enterprise work." "We did good work there through the office of Regulatory Reinvention and the work of this body working together. If you look at it, we eliminated over 1,000 rules last year on a net basis. We've roughly eliminated ten rules for every new rule we've added. That's how you create an environment that's conducive to business, while still protecting our citizens that will generate jobs." Come on, you can all join in!

    • MBella MBella on Oct 17, 2014

      I relaized he was full of it when he first started running campaign ads. He was apparently this crazy genius nerd that had this very complicated plan to save the state that only he could understand. He posted this gift to humanity on his website. It was just 20 vague bullet points. Things like "bring back jobs to MI" and "Save manufacturing" On another note, why the need for a new law. Isn't Tesla's direct to customer business model already illegal in Michigan?

  • Stevelovescars Stevelovescars on Oct 16, 2014

    Allowing Tesla to sell directly does NOT have anything to do with allowing all other manufacturers to do the same. These pro-dealer laws usually fall under franchise protection rules... in other words, protecting franchisees (dealership owners) from having to compete directly with the OEM. Since Tesla has no franchised dealers, there is nobody to "protect." Other manufacturers who have franchise agreements in place still won't be able to come in with factory stores. Michigan has traditionally had very pro-dealer rules. When I was growing up, it was commonplace for dealers to only be open past 5 pm one day per week and NEVER on Saturday or Sunday. This made cross-shopping (or any shopping, for that matter) difficult for consumers who had jobs. Dealers that started trying to expand their hours usually got bricks through their plate-glass windows. This wasn't a law, but basically a form of collusion by dealers to limit competition. I think there were some unions covering dealer employees as well. This does seem like a lose-lose proposition for Gov. Snyder. Couldn't happen to a nicer guy.

  • Duaney Duaney on Oct 16, 2014

    Oh it used to be a free country!

  • Olddavid Olddavid on Oct 16, 2014

    You morons who believe in the good will and intentions of Elon Musk are the same people who believe unions are a "good idea" with no place in modern society. Well, to you who will allow this "camel in the tent", I wish you good luck in 2040 trying to get anyone's attention on an engineered warranty claim. "But they promised......"

    • See 1 previous
    • Luke42 Luke42 on Oct 17, 2014

      Limbaugh-style strawman arguments only work when the people you're talking about are not in the room. I'm an EV enthusiast who lives in a strongly union state. I don't have a problem with unions, at least so far, because the union guys I've worked with show up on time, do quality work, and ask for a living wage and a safe working environment in return. That's a fair deal to me. I reserve the right to change my mind if they ask for a different deal or I get caught up in infighting between unions with overlapping work responsibilities - but so far, so good. I can probably keep it that way, too. But I'm under no impression that either car dealers or Tesla are out for my own good. They want to make as much money from me as they can. Some dealers/companies try hard to maintain a customer relationship over the long haul (Toyota), some just grab your wallet at the first opportunity (Volkswagen). Some try (Ford), but won't sweat it if it doesn't work out. Where will Tesla fall? Don't know. I know they want my money, and they have a compelling product. Forums suggest that aftermarket support is good. But I'm not kidding myself about what they really want from their customers. I still want a Telsa because I'm a geek and it's a nice eleictric car, but companies run on cold hard cash - regardless of what their founders say, and that's what Tesla wants from me. Just like every car dealer I've ever done business with. The price competition is mostly between brands in my observations, without much difference in price between dealers. Yea, so quit it with the strawmen, OK? Starting with a poorly informed characterization of someone else's argument, and smashing down your own characterization of it doesn't teach anyone anything - and it only works if you're preaching to the choir. When the well heeled liberal EV enthusiasts show up, though, you've got to argue with our actual opinions - rather than with a purposefully weak strawman of your own contruction, a strawman that doesn't really exist.