This is also excellent news for Rivian and Lucid.
Earlier this month, a Republican lawmaker in the Michigan state Senate sponsored a bill that, if passed, would effectively reverse an earlier deal allowing Tesla to finally sell and service its vehicles in the Wolverine state. Other small EV automakers such as Rivian and Lucid also stand to benefit from the agreement because, like Tesla, they operate their own dealerships instead of the traditional franchise business model. The bill passed in the House and the next step was a Senate vote.
Fortunately, all three automakers can relax this holiday season because, according to CNET, the Senate decided against taking up the bill before heading into recess until next year. Michigan House Bill 6233 is now effectively dead.
"The legislation passed by the Michigan House of Representatives was anticompetitive and undermined consumers' access to different products and consistent, dependable automotive service," said a Lucid spokesperson. "These legislative efforts - and similar efforts in other states - are clearly driven by special interests, not consumers, as nearly 70% of all EVs sold in Michigan in 2019 were sold directly to consumers."
This whole debate began back in 2014 when a law was passed that prohibited direct sales from automakers to customers following immense lobbying from the Michigan Auto Dealer Association. Ford and GM also supported the so-called "anti-Tesla" bill.
Michigan residents who wanted, say, a new Tesla Model S, not only had to travel to neighboring Ohio or Illinois to make the purchase (direct sales are allowed in both states) but would also be forced to leave their home state for all maintenance and service issues. An agreement was finally reached last January that would allow Tesla to conduct sales in Michigan, though there was one catch: buyers had to have their vehicles titled in another state and then transferred to Michigan. The vehicles also had to be sold by a Tesla subsidiary.
This settlement could serve as a blueprint for other states who still impose a Tesla sales ban. Several Michigan lawmakers, mainly Democrats, were against reneging on the deal, but chances are their political opponents will try again in the next legislative session.