Tesla Sues Michigan After State Bars Vehicle Sales

Steph Willems
by Steph Willems

After its two-year-long bid to gain a sales foothold in Michigan hit a brick wall, Tesla has filed a lawsuit against the state.

The suit, filed in a U.S. District Court in Michigan, targets governor Rick Snyder and other top officials, Reuters reports.

Unlike other automakers, Tesla uses a direct sales model to get its vehicles to buyers, rather than a traditional franchised dealer network. That clashed with state laws forbidding the practice — laws passed in 2014 to exclude companies like Tesla from using a direct sales model.

Recently, Michigan denied Tesla a dealership license.

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The lawsuit demands that Michigan officials hand over an order allowing the automaker to sell vehicles. Tesla, as well as its CEO, Elon Musk, wants it in writing that the company is “entitled to a vehicle dealer license.” Beyond that, it wants a judge to repeal the law that bars the company from operating in the state.

Tesla is able to operate stores in 23 states and the District of Columbia, but four states, including Michigan, have shut their doors. Other states have placed limits on the number of stores Tesla can operate.

In a statement reported by Reuters, Tesla blames existing automakers and protectionist policies for its market shutout.

“Unfortunately, the local auto dealers and local manufacturers have made clear that they oppose any law that would allow Tesla to operate in Michigan,” Tesla states. “As one leading legislator told Tesla: the local auto dealers do not want you here. The local manufacturers do not want you here. So you’re not going to be here.”

While its dealership application was shot down, Tesla has a used car license application that is still under consideration.

This story originally appeared on thetruthaboutcars.com

Steph Willems
Steph Willems

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  • Smartacus Smartacus on Sep 23, 2016

    oooh that car and that company just because as popular in Michigan as Ohio Governor Robert Lucas.

    • Perry F. Bruns Perry F. Bruns on Sep 27, 2016

      ...or at least in the Michigan State House. I mean, at least Lucas' notes didn't cost GM or Ford any territory. Elsewhere in Michigan, I imagine Tesla's at least as popular as Rick Snyder.

  • Jonny_Vancouver Jonny_Vancouver on Sep 24, 2016

    Tesla is in the right here. Just how much more badly do things need to get for those other automakers before they admit that what they're doing isn't working. More people need to get behind what Tesla is doing and in more ways than one. They're actually able to stand up to major corporations and their business model is better for consumers too.