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Michigan's new law 'clarifies' ban on Tesla's direct sales model

Jon Fingas, @jonfingas
October 21, 2014
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If you're hoping to find a Tesla Motors store in Motor City, you may be waiting a long, long time. Michigan Governor Rick Snyder has signed House Bill 5606 into law, explicitly banning Tesla's direct sales model in the state. Snyder contends that the measure only "clarifies" existing legislation. It was already illegal to sell cars outside of franchised dealerships, he argues -- this new law just eliminates any room for confusion.

Snyder is quick to add that politicians should reexamine the existing business model and make changes if the status quo doesn't serve the public interest. If nothing else, he's open to Tesla stores at some point down the line. However, it's no secret that dealers (and to a lesser degree, Tesla's competitors) wanted to see this bill pass. Tesla accused Senator Joe Hune of adding anti-Tesla language to the bill to please the Michigan Automobile Dealers Association, one of his chief campaign contributors and a frequent opponent of Tesla's. GM, meanwhile, officially endorsed the bill with claims that it would make all car makers "follow the same rules;" the company may not like dealerships, but their requirement prevents Tesla from gaining an advantage. Whether or not the accusations are true, it's easy to see the economic incentives for keeping Tesla out. All of the US' automotive giants are headquartered in Michigan, and the state might not want to see the dealers for its best known business undermined by a handful of electric vehicles from California.

[Image credit: Emile Wamsteker/Bloomberg via Getty Images]

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