Tesla Direct Sales Ban Reinforced In Michigan, GM Supported Signing

Cameron Aubernon
by Cameron Aubernon
tesla direct sales ban reinforced in michigan gm supported signing

It’s official: the ban preventing Tesla from directly selling its wares to customers in Michigan has been reinforced.

Michigan governor Rick Snyder signed into law HB 5606, now known as Public Act 354 of 2014. The act not only prohibits automakers from telling their dealerships what fees the latter can charge customers, but reinforces a law already on the books:

This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan — because this is already prohibited under Michigan law.

Though Tesla can do little more than open a showroom and a repair shop for now, Snyder said lawmakers should “always be willing to re-examine” legislation with the aim of improving the consumer’s experience “in a more efficient and less costly manner.”

Meanwhile, at least one automaker is happy PA 354 is on the books. In a one-sentence press release, General Motors had this to say prior to the bill’s signing:

We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan; therefore, we encourage Governor Snyder to sign it.

Per Jalopnik, GM sent a similar message to Ohio governor John Kasich back in March of this year regarding SB137, which would have allowed Tesla to directly sell to customers in the state; the bill later died in the Ohio Senate.

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  • OneAlpha OneAlpha on Oct 22, 2014

    Do you suppose that Tesla could argue that they aren't actually selling the cars, they're just trading them for money? I've heard of more tortured logic than that making it past a judge.

    • Mcs Mcs on Oct 22, 2014

      A twist on that would be that they could sell a gift card that could be redeemed for a car if the buyer chooses to do so. Another twist is that they could go into the wheel business. If you buy 4 wheels, you could get a gift card for a free car to attach the wheels to.

  • Onus Onus on Oct 22, 2014

    States can't ban a person from going to the DMV with MSO, and a bill of sale. Seriously not too sure how states enforce this issue.


    1: In 1984 many states made it illegal to resell tickets to the Jackson's Victory Tour concerts. So enterprising people would list a Frisbee for sale for $140 with FREE Jackson Tour tickets included! 2: I sold Oldsmobiles for 14 years and knew my product very well. I sold hundreds of Oldsmobiles to discerning customers who appreciated a low pressure sales approach and I had long term repeat business as well!

  • Carilloskis Carilloskis on Oct 23, 2014

    There are ways around the sales men in current dealerships if you know what the invoice for the vehicle is you can go talk to some one in the back normally the dealerships fleet manager, who is a salaried employee you might have to do a little negotiating. the Dealer still makes money off the sale and doesn't have to expend resource to sell a vehicle, Most dealers make nearly all their money on service, and warenty work anyways , so if they make you happy with a purchase then you'll more likley be back for service. My parents have either ordered their vehicles direct or had their dealer locate the cars they want. When my dad went to order his 2011 Mustang in august of 2010 it turned out that the dealer had one on order identical to the one he spect out except for a diffrent color piping on the leather the car arived 3 weeks later and he only paid invoice for it. Somebody brought up apple as a direct sales company whlie you can buy from the apple store or their web site you can also buy their products from many retailers including walmart best buy target AT&T simply Mac etc. for all around the same price, they also charge the same reguardless of if you buy in store or online. but they still have to pay retail staff reguardless of where you buy, so i dont think manufactures direct selling gives the consumers any beniffit , just gives the manufacture a bigger profit margin.