Michigan Denies Tesla's Application For A Dealer License

In news that will likely not shock anyone, Michigan's Secretary of State office has official denied Tesla a dealership license to sell vehicles in the state. The ruling issued last week follows a hearing earlier this month to review Michigan's initial motion to deny Tesla's request for a license, submitted last November.

“The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles. Tesla has told the department it does not have one, and cannot comply with that requirement,” said Michigan Department of State Communications Director Gisgie Dávila Gendreau in an email to The Detroit News.

This is due to a state law signed in 2014 which states,  “a vehicle manufacturer shall not … sell any new motor vehicle directly to a retail customer other than through franchised dealers.”

Tesla has been fighting tooth and nail to sell their vehicles in Michigan for a few years now by lobbying and applying for a license.  As Automotive News notes, Michigan is the most populated state that doesn't have a Tesla gallery or store. 

"At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state. As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers," Tesla said in a statement to Automotive News.

Now people outside of Tesla have been trying to change the law. As we reported back in February, a 22-year launched a petition to repeal this law. Also, Rep. Aaron Miller, R-Sturgis introduced a bill into the state's legislature to allow companies like Tesla to do direct sales. But as The Detroit News reports, the bill has sat stagnant.

“The discussion’s not over but for this session I think we’ve reached that point of no progress. I think the clock is going to run out on us,” said Miller.

Now it should be stated that anyone from Michigan who wants to order a Tesla can do so from the company's website. You'll have to pickup your vehicle outside of the state however, the closest ones being in Ohio.

Where does Tesla go next? That is anyone's guess at the moment. But as Tesla's general counsel Todd Maron said back in May, the company would either go to court or the legislation to make the change. Our hunch is Tesla will be going for the former.

Source: Automotive News (Subscription Required), The Detroit News