Tesla, Michigan Finally Reach a Truce
A long-standing legal battle pitting Tesla against the state of Michigan has finally been resolved. It was announced Wednesday that the automaker’s 2016 suit against the state, which forbids the direct-sales model employed by Tesla, ended in a settlement a day earlier.
The result? A way for Michigan residents to own and conveniently service a Tesla in the notoriously protectionist state.
Michigan law stipulated that new vehicles could only be sold to consumers through the age-old dealer model that cushioned its auto industry from modern threats. Upstarts like Tesla eschewed such a model for obvious financial reasons.
Tesla’s lawsuit resulted in a resolution filed in U.S. District Court that will make ownership of its vehicles a lot easier.
From Reuters:
The stipulation also says Tesla may “operate under existing Michigan law; sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan; and, indirectly own service and repair facilities in Michigan through a subsidiary, Tesla Michigan.”
Under the settlement, Tesla can open galleries to inform potential customers about their vehicles, arrange demonstration drives, and carry out “ordering and purchase of a vehicle for which legal title transfers out-of-state.”
As a lack of nearby service facilities serves as a major roadblock to ownership, Tesla has long sought to open such centers in Michigan. The advent of the popular Model 3 only increased its desire to penetrate the market. Before now, owners living in the mitten had to drive to Ohio for servicing; the recent creation of a center in Toledo, while closer than Cleveland, still represented an inconvenient haul. If the car was disabled, it made the trip even more loathsome.
And this will remain the case until Tesla Michigan gets service centers off the ground. Ohio, of course, will remain the point of sale for most Michiganders.
[Image: JL IMAGES/Shutterstock]
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"sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan" These carefully crafted words tell me that Michigan's Tesla store will legally be an arm of another state's Tesla store, somewhat like the way an embassy operates. So the paperwork you sign on Michigan soil might say "Tesla of Ohio" as the seller. I can't imagine anyone has to make a special trip to make this work, or else the agreement is valueless. Sales tax always is calculated for the buyer's home address, not the point of sale, and it can even vary by county within the same state. I've done this several times, and it's not complicated. Dealers are equipped to handle the paperwork of neighboring states.
I see Teslas here on the west side of Michigan... but the lack of a dealership and/or nearby service center has stopped me from looking at their cars. Of course I would only want to buy the most stripped down Model 3, even though I'm not a huge fan of the duck face.