Tesla Asks For Compromise To Resume Sales In Michigan

Tesla Motors is still hopeful that common ground can be found with lawmakers in Michigan in order to resume business there, and has a new proposal for state legislators.

Ever since Governor Rick Snyder signed a bill last October, unequivocally blocking factory-direct vehicle sales, representatives with Tesla have been working on a solution.

“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 shipped here,” said Diarmuid O’Connell, vice president of business development for Tesla.

“A solution that has worked in other states, where there has been a concern amongst the dealers or GM that we were going to change the world by selling directly, is that we get allowance to open a certain number of stores,” he said.

Tesla Michigan

Though several Superchargers are available Tesla Motors has no retail stores in Michigan. Customers must travel to Cleveland, Chicago or Columbus, the nearest facilities to buy or service a Tesla. Screenshot via TeslaMotors.com

According to The Detroit News, the actual number of stores that Tesla is asking for is between five and 10. A similar aggrement was reached elsewhere earlier this year: after previously banning direct vehicle sales, New Jersey legislators amended their law. Tesla is now able to open up to four stores in New Jersey, but only if the carmaker has a service center within the state’s borders.

According to Tesla, the laws in Michigan not only block the company from selling vehicles (or even talking to the public about its vehicles), but it also prevents Tesla from opening a service center. About 300 Tesla vehicles are currently registered within the state, which O’Connell said can’t receive warranty service or certified repairs without traveling out of state.

“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,” O’Connell remarked.

SEE ALSO: FTC Stance On Factory-Direct Sales Extends Beyond Tesla And Michigan

However, a faction of this same “car culture” may be working against Tesla. Three of the country’s largest automakers – General Motors, Ford and Chrysler – each have a significant presence in Michigan.

“There are incumbent interests that would love to see us slow down,” said O’Connell. “GM has entered into a lot of the state legislative fights that we’ve had to basically cap or prevent us from operating.”

For now, the governor’s office stands by the sales ban, saying that the law signed last year by Gov. Snyder only clarified that factory-direct vehicle sales were already prohibited. Still, Tesla is working to change this, with the hope that a compromise can be found.

“We have been meeting throughout the entire year. It’s something we’re continuing to work on,” said Jim Chen, Tesla’s vice president of regulatory affairs.

“We’re trying to work something out with everyone,” he added. “At the end of the day, legislation is all about compromise.”