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William Maley

Tesla Takes the State of Michigan To Court Over Direct Sales Ban

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It was going to happen sooner or later, but Tesla is taking the state of Michigan to federal court over its ban on direct sales to consumers. According to the suit, Tesla is seeking “to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla-owned facilities in the State of Michigan”.

This suit comes after the Michigan's Secretary of State office denied Tesla a dealership license earlier in the month.

“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 at the time.

The law in question was signed back in 2014 by current Governor Rick Snyder which made it illegal for an auto manufacturer to sell vehicles directly to consumers. The law also prohibits a manufacturer from performing service on their vehicles.

“For the last two years, Tesla has pursued legislation in Michigan that is fair to everyone and that would benefit Michigan consumers. Giving auto dealers a monopoly on car sales benefits them, but harms consumers,” said a Tesla spokeswoman to Automotive News in a statement.

The lawsuit names Synder, attorney General Bill Schuette, and Michigan Secretary of State Ruth Johnson as defendants. Tesla has also requested for a jury trial. 

Tesla is seeking a permanent injunction to prevent officials in the state to enforce the relevant part of the law. This would force the state to give Tesla a dealer license.

We'll be watching closely to see if Tesla can make any headway.

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


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Yeah, screw the D3 in this regard. If you make a better product you'll do fine and put them out. This only shows me the D3 are a bunch of babies afraid to make a great product.

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As much as I love GM, I have to agree with ccap41 and others that in today's 21st century, companies should have the right to sell direct and not have to have a dealership. Tesla has Petboys work on their auto's so that does not conflict with the manufacturer working on their own auto's.

Direct sales rock! :metal: 

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1 hour ago, smk4565 said:

So are the only places to ban Tesla sales Michigan and North Korea?

Per the Bloomberg story,

http://www.bloomberg.com/news/articles/2016-09-22/tesla-lawsuit-claims-michigan-direct-sales-ban-unconstitutional

The only states that bane direct sales are Michigan, Texas, Connecticut and Utah.  

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That's convenient, but these automakers forget their own history. Before GM, Ford or Chrysler were big names with national dealers and all that, how DID they sell their wares out of their fledgling garages? 

 

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Americans wouldn't know a free market even if they were pimp-smacked by the invisible hand.

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2 hours ago, Wings4Life said:

The history shows that these laws were all agreed upon by the big 3 and have been in the books for decades to prevent just this sort of thing.  So what has changed?

21st century technology and the Internet, ya know that thing that that idiot demobot said he created! ;):roflmao:

In all honesty, today's technology has allowed people to do their own research, schedule a test drive if they want or just buy it online. As such, new auto companies do not see the need for the ancient 20th century laws.

Gotta change with the changing times. As long as there is no monopoly, there is no reason a company should not be able to sell direct.

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On 9/22/2016 at 1:51 PM, ccap41 said:

Yeah, screw the D3 in this regard. If you make a better product you'll do fine and put them out. This only shows me the D3 are a bunch of babies afraid to make a great product.

Agreed!

11 hours ago, dfelt said:

21st century technology and the Internet, ya know that thing that that idiot demobot said he created! ;):roflmao:

In all honesty, today's technology has allowed people to do their own research, schedule a test drive if they want or just buy it online. As such, new auto companies do not see the need for the ancient 20th century laws.

Gotta change with the changing times. As long as there is no monopoly, there is no reason a company should not be able to sell direct.

Internet is cool in regards to car buying. Would love to buy direct myself.

11 hours ago, bigpoolog said:

Americans wouldn't know a free market even if they were pimp-smacked by the invisible hand.

Nor do they really want one.  They seem very comfortable with the marginal quality provided by large corporations that do not have consumer interests in mind.

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