Tesla Looking To Directly Sell Cars In Michigan

Aug 05, 2015 07:44 PM EDT | John Nassivera

Tesla Motors is intent on "fighting hard" with politicians and dealers so it can start selling vehicles and service cars in Michigan.

The issue began in October when Gov. Rick Snyder signed a bill that banned automakers from selling cars directly to customers in the state, blocking the Palo Alto, Calif.-based electric car maker in the process, according to The Detroit News. The move took away Tesla's loophole for operating company-owned retail stores that it used in other states.

"We've got a rabid fan base here who are buying cars everywhere else in the U.S. and bringing them here, having them drop shipping here," Diarmuid O'Connell, vice president of business development for Tesla, told reporters at a meeting of industry insiders at the Grand Traverse Resort Tuesday.

"We can't even have service here, which is incredible. It's just incredible that in a free market of this sort and in a car culture like Michigan that we're being held at a distance."

Tesla's over 270 customers in Michigan had to buy their cars in about 20 other states that sell electric vehicles, and the company said it needs around 10 centers to provide its services to its customers, according to the Detroit Free Press.

While the original version of the bill only allowed automakers to sell new cars directly to retail customers through its franchised dealers, the updated version took away the word "it's," which Tesla claims was specifically aimed at it because it doesn't have any dealerships, ValueWalk reported.

Snyder requested last year that the legislature discuss the success of the automotive sales model in Michigan during the 2015-16 session, but the Federal Trade Commission urged the Michigan legislature to reconsider the ban. FTC staff members believe the ban leads to "protectionism" for dealers and isn't good for consumers and competition.

O'Connell said he is talking with dealers, automakers, legislators and officials during his trip to Michigan about allowing Tesla to sell cars there, adding that the company wants to invest in the state, ValueWalk reported. The executive also said that dealers and even other automakers view Tesla as a threat.

"GM has entered into a lot of the state legislative fights that we've had to basically cap or prevent us from operating," O'Connell said. General Motors said in a statement that it doesn't have a problem with competition as long as all companies follow the same rules.

Snyder said he is "happy for a dialogue to find common ground" with Tesla, adding that he wants for there to be an environment for success for business in Michigan, the Detroit Free Press reported. However, he did not predict how far Tesla will get in its quest to directly sell its cars in the Great Lakes State.

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