Michigan (And General Motors) To Tesla: Stay Out Of Our State
Dealers have tolerated and learned to cooperate with online car shopping services such as Edmunds.com and TrueCar.com. But a manufacturer who bypasses the traditional franchise system to sell directly, either in physical stores or online, is a threat, even a low-volume automaker like Tesla. Tesla has been selling through stores or galleries mostly in upscale shopping malls along the east and west coasts and in Pennsylvania, Ohio, Indiana and Illinois. The company’s website shows a network of 60 locations in 23 states, but some of those can’t sell directly. The company takes orders online. That approach undermines how franchisees have sold vehicles for decades, and they are fighting to stop Elon Musk, Tesla’s cofounder and CEO, from establishing his own retail model.
Many states have similar laws in place, which is why Tesla is challenging the dealership model on an individual state-by-state basis. So far, Texas and Arizona have banned Elon Musk’s preferred direct sales model, while Massachusetts, Minnesota, and New York recently reversed course and allowed Tesla to sell via its storefronts. A Tesla representative told the paper that the company does not yet know if it will file a lawsuit against the state of Michigan. Read more here.