On Monday, three senior Federal Trade Commission staffers sent an 11-page letter to Michigan State Sen. Darwin Booher, R-Evart, urging an end to its effective ban against automakers – like Tesla – from selling factory direct.
The FTC staff members representing a unanimous viewpoint voted 5-0 by the commission said current legislation equates to “protectionism” for established dealers, and is “likely harming both competition and consumers.”
While the FTC members made their point, the power of the federal agency is limited, as it can only advise states and not force them to take such an action.
The letter follows Gov. Rick Snyder’s signing of a bill last October prohibiting automakers from selling vehicles directly to the customers of Michigan. The bill was strongly backed by Michigan’s new car-dealership lobby, and approved in overwhelming odds throughout both houses.
Snyder says that the law, which essentially bans Tesla from opening the factory stores similar to those it has in 20 other states, “clarifies and strengthens” the existing law prohibiting direct sales of new cars to consumers of Michigan.
At an event on Monday, Gov. Snyder told The Detroit News that he was unaware of the FTC letter, but would take a look at it.
We shall see how he responds to the FTC’s unambiguous stance.
“Michigan’s consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all automakers,” said the commission.
Tesla’s opinion on the FTC letter was straightforward, saying on Twitter Monday that states “should allow consumers to choose how they buy their cars.”
Despite the lack of Tesla dealerships in Michigan, there are still 50 Tesla vehicles registered within the state as of October of last year according to research firm IHS Automotive.