Michigan Governor Signs Bill To ‘Strengthen’ Ban On Tesla’s Direct Sales Model

Yet another state has clamped down on its dealership laws, as Michigan tries to stop Tesla from opening up a showroom. And even General Motors came out to support the state’s actions.

Michigan Governor Rick Snyder on Tuesday signed the bill, but according to The Detroit News, Snyder insists it’s just a clarification of the existing law and doesn’t necessarily ban Tesla from selling cars in the state.

What the bill does do, however, is say that a manufacturer must sell its cars in Michigan through a franchised dealer – it just doesn’t have to be their own franchised dealer. It still prohibits the sale of cars to customers directly from the manufacturer. But the bill closed a very thin loophole to get Tesla to open up a showroom in the state.

Elon Musk wrote on his blog on October 16 that this was “a raw deal in Michigan,” calling out the various dealer’s association interests pushing the bill that was originally intended to just cap the amount of money a dealer can charge for documentation fees before this provision about a change in language was stuck in on October 1.

Then Tuesday morning, GM issued a statement in support of the bill:

“We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan…”

Tesla shot back with a statement targeting GM’s misinterpretation of the reasons franchise laws exist, and said, “”What’s good for GM’s customers is not necessarily good for Tesla’s customers.”

Gov. Snyder is currently in a tight re-election race due to end in the next couple weeks, and any perceived weakness in defending Michigan-based automakers on their home turf could very likely have sealed the election for his opponent. But the fight will likely continue as attempts on bans in states like Ohio and Massachusetts have been struck down – while those in New Jersey, for example, remain.

By Zac Estrada

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