By on August 12, 2016

Tesla Model 3 Prototype on road, Image: Tesla Motors

Michigan doesn’t want its residents to order a Tesla, but it sees no problem in owning $72 million in stock to bolster its state retirement fund.

According to The Detroit News, the Michigan Department of Treasury bought a further $48 million in Tesla shares in the second quarter of this year, boosting its stake to 339,623 shares — more than triple the amount it owned in March. Meanwhile, Michigan won’t budge on laws that prevent Tesla from selling vehicles in the state.

The State of Michigan Retirement Systems holds about $60 billion in funds to support the retirement pensions of state employees, as well as the police, judiciary, and education sectors. While the Tesla stock makes up just over one-tenth of one percent of the fund, it’s more than double the combined worth of its General Motors and Ford stock.

It’s an awkward position for the state. Michigan keeps Tesla out to protect the Detroit Three, but invests more in Tesla.

In 2014, Michigan passed a law banning the direct sale of automobiles. That means that Tesla, an automaker without a franchised dealer network, can’t court buyers in that state. Allowing it would mean unfair competition for automakers who operate a dealer network, lawmakers claim.

In a statement made to The Detroit News, the Treasury Department’s Bureau of Investments said, “The additional (Tesla) shares did not materially add to the risk of the overall $60 billion investment portfolio.”

Since the passage of the bill, Tesla has fought to persuade the state to allow sales of its vehicles. So far, applications for dealer and service facilities have been stymied by requests for more information.

Political and public sentiment seems to be working in Tesla’s favor, albeit slowly. A bill introduced by State Rep. Aaron Miller (R-Sturgis) seeks to overturn the ban on direct sales, while an interest group called the Michigan Freedom to Buy Coalition wants a legislative solution to Tesla’s plight. Other free-enterprise advocates support the automaker, but its opponents loom large.

The Michigan Automobile Dealers Association, which initiated the 2014 bill, continues to stand its ground. If other automakers can play by the rules, it states, so can Tesla.

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11 Comments on “Michigan Doesn’t Allow Tesla Sales, But Keeps Buying More Tesla Stock...”

  • avatar

    Doesn’t surprise me, not as though the lawmakers are the ones doing the investments. Limiting the retirement portfolio to investments relevant only to the state would be foolish.

    • 0 avatar

      Correct. The left hand and the right hand of government act independently.

      The irony of the situation isn’t without some mirth

    • 0 avatar
      SCE to AUX

      Agreed. Investment policy doesn’t need to be linked with the state’s political machinations on Tesla.

      But I’d like to see them explain why their Tesla holdings doubly outweigh those of GM and Ford.

      • 0 avatar

        I could see a backlash if they DID have more GM, FCA, or Ford stock. Someone would claim that they are seeking favor with these companies, that they are getting favors from these companies, or some other extreme view point that seems permeate our society today. Tesla’s biggest mistake, in my opinion, was hiring former GM people to help them work with suppliers. GM is notoriously hard on suppliers and the people that came over took an optimal supplier relationship and made it adversarial. Do some research to see when things started to really slow down and you may find it coincides with certain key hirings.

  • avatar
    Big Al From 'Murica

    I like Tesla, I’d love to own one, but I’m not sure it is the sort of company I want my retirement wrapped up in.

  • avatar
    Big Al From 'Murica

    And I get that they don’t need a grill, but just filling in the spot where it would be without altering the shape makes it look like one of those non running styling exercises made out of clay or foam you’d see at a car show. I prefer the old look.

    • 0 avatar

      I see. You like Tesla, but don’t want your retirement involved with them and you don’t like the appearance of their latest designs.

      But you like them.

      • 0 avatar
        Big Al From 'Murica

        Well liking the business model and liking the cars aren’t really connected. I like the cars because they are cool and perform well. As to preferring the previous design, well would yo prefer a 68 Mustang or a 74 Mustang? New models do not always look as good as the models they replace.

  • avatar

    That is terrible. It’s be like a federal government ordering GM to make thousands of Volts and then buying Nissan Leaf’s themselves. Oh, wait… I am pretty sure the current administration did exactly that.

  • avatar

    The Executive Branch and the Legislative Branch don’t agree on something???

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