Tesla's Battle To Sell Cars In Michigan Isn't Over

Dec. 06, 2020 11:10 AM ET by Jay Traugott Electric Vehicles / 6 Comments

State politicians are trying to reverse a previous agreement.

Following years of fighting, Tesla and the state of Michigan reached an agreement last January that will allow the automaker to sell and service its electric vehicles in the state through legal loopholes. These included registering cars from other states for deliveries and wholly-owned subsidiaries for servicing them.

A 2014 law previously prohibited direct sales from automakers to customers as a result of Michigan Auto Dealer Association pressure. Tesla was not granted a license to sell cars and customers were forced to buy and service their vehicles in states which didn't have a similar law, such as Ohio and Illinois. Both Ford and GM supported this "anti-Tesla" bill.

2017-2020 Tesla Model S P100D Front Angle View

2016-2020 Tesla Model X P100D Front View Driving

The automaker sued Michigan in 2016 claiming the ban violates commerce laws and this ultimately led to this year's settlement. Unfortunately, it seems some Michigan lawmakers are having second thoughts.

The Detroit News reports state House lawmakers passed a bill last week that reverses the deal, once again preventing vehicle manufacturers from directly or even indirectly owning a vehicle repair or service center. The Republican lawmaker who sponsored the bill refused to comment and nor has Tesla. The Democrat House Minority Leader tried and failed to pass a compromise bill that would have allowed for a limited number of licenses to EV automakers, including Rivian, which is experiencing the same problem as Tesla.

2017-2021 Tesla Model 3 Front View Driving

The just-passed bill "does not solve the problem that we have with the lawsuit with Tesla," the lawmaker said. "It opens up the state to additional litigation, which costs taxpayer dollars. And it also is a very anti-market approach to vehicle sales."

The new legislation still requires Senate approval and, ultimately, the governor's signature before becoming law. Michigan residents who have been hoping to finally be able to buy locally a new Tesla Model 3 or Rivian R1T, to name a couple of examples, may again be forced to wait once again as some lawmakers and auto industry lobbyists refuse to let this issue be finally resolved once and for all.