Tesla Will Butt Heads With Michigan Buttheads Again
Originally published on Gas2.
Despite having a plant in the state, Tesla has been blocked from selling its cars directly to the people of Michigan. Again.
Last year, the Michigan legislature passed a new law making it crystal clear that Tesla was not welcome in The Great Lake State. Governor Rick Snyder, a man who knows which side his bread is buttered on, signed the bill about 10 seconds after it was enacted. Thanks to a very powerful franchise dealer association, Michigan has drawn a bright red line around itself proclaiming “No Tesla Allowed.” One suspects the Big Three automakers, all of whom have their corporate offices in Michigan, may have had something to do with this as well.
That legislation passed despite a plea from the Federal Trade Commission reminding law makers that competition is the essence of the capitalist model and that laws favoring a small group of private businessmen over the public interest are bad policy. The legislators promptly threw the letter in the trash and voted the way their most prominent campaign contributors told them to. Nothing unusual in that.
But Tesla Motors is not easily deterred. To that end, the company has been mounting a charm offensive within the state, offering key legislators and state officials test drives in its cars to educate them to the benefits of electric motoring. “There doesn’t seem to be much interest from not only the dealers, but manufacturers like GM that want to continue to shut us out of the market entirely,” said Jim Chen, Tesla’s vice president of regulatory affairs, in a recent phone interview with the Detroit News, Will Nicholas, Tesla’s government relations manager, told the newspaper, “We have the majority of next year to lobby, discuss and debate the merits of what we think is a co-existence of our business model in the state of Michigan.”
Terry Burns, executive vice president of the Michigan Automobile Dealers Association, says Tesla is welcome in Michigan … as long as they sell through franchise car dealers. Burns even identified many established dealers would be happy to work with it to help market its automobiles, thereby demonstrating he has missed the whole point of the Tesla sales model.
Even Roger Penske- a racing legend who knows a thing or two about the car business- has weighed in on the matter. “If you look over the history of automotive manufacturers who wanted to sell direct or own their own dealerships, it’s been a failure. Tesla should just put their arms around many of us who can represent the car, service the customer — and they could worry about other customers.”
Tesla is investing in Michigan, despite the cold shoulder it has gotten so far. It has 4 SuperCharger locations operating within the state and shows a proposed service center located near Detroit on its website. It also bought Riviera Tool Company earlier this year and renamed it Tesla Tool. “We’re an American company that is building cars in the United States that is using over 55 Michigan suppliers — that is spending over $120 million in parts and components from Michigan suppliers to build American-made cars. Why shouldn’t we be allowed to sell in Michigan?” asks Tesla’s Chen.
Tesla is a patient but formidable foe. The world of automobiles is changing rapidly, despite the desire by entrenched private interests to resist. Hopefully, Tesla will eventually win its battle with the Michigan legislature. The only question is: when?
Reprinted with permission.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.
Ah, free enterprise, democracy, by the people, for the people. Isn’t it wonderful?
I can’t help quoting George Carlin: “It’s called the American dream because you have to be asleep to believe in it”.
Maybe Tesla needs to get scary. I remember somebody, a DA actually after too much to drink, saying “you get your reputation (power) not by putting away the guilty, but by putting away the innocent.” Basically if Tesla ended some of these scoundrel’s careers and put some fear in the rest I bet they would change their songs…
Michigan consumers will likely have the final say.
As Tesla automobiles begin to bite deeper into the EV market, especially with the Model 3, Teslas will be owned by more and more Michigan drivers.
I doubt Tesla Motors will have to push or twist arms at all. But they will have to be patient, as the dinosaurs will hold on as long as possible.
just a question about the Penskey quote, if they are taking care of the customers who is he refering to that tesla can then be free to take care of?
The automakers’ REAL customers, of course. The dealers.
I think the old sage about “difficult to get a man to understand something when his paycheck depends on not understanding it” goes here…
“First they ridicule you, then they fight you, then you win”.
EVs do appear to be going through phase 2 at the moment. There’s a story in Fortune today “More Bad News for Tesla”, which mentions “Tesla Model S sedans suffer battery component failure”.
Follow the link at you find that it’s about the early Model S drive train issues – something Musk announced has been resolved in newer models, and will be dealt with under warranty where it does affect.
So the Fortune article is misleading on these counts:
It’s not about batteries.
It’s not about the currently selling model S.
‘More bad news’ implies a string of bad news – from what I’ve read, Tesla have had a great year: 50% growth. Gigafactory ahead of schedule. Model X in series production. Model 3 reveal next March. Wow, wow, wow and double-wow!
Can’t wait for phase 3.
Fortune?! Misleading?! How can this happen in America with all our laws against lying in the media… Oh wait… never mind.
Ya because the dealer is looking out for the customer, I can tell every time I sit down with one he has my best interests in mind. If Penske, who my dad use to race against is so sure the Tesla direct sales model is going to fail, then why not just let them fail fair and square. Aholes.
The auto industry has so much power. This is a huge story worthy of the highest attention from the media…but the media is showing their true colors by completely and totally ignoring the shutout of Tesla by Detroit. Let’s see: environmentally friendly car…reduces oil imports…more domestic content than any other car sold in America…on track to be the safest car ever built…a growing contributor to favorable international balance of payments…causing global car manufacturers to re-evaluation technology options so they can compete….but US companies use their money in lobbying power to try to kill Tesla.
In the 1970s US car companies spent vast sums on trying to stop environmental legislation. They took their eye off the ball and were slow to give the US public competitive cars (some insist US company’s NEVER created competitive cars)…and in the process lost huge market share to imports, especially Japanese.
How many think we are seeing the same thing happening with electric vehicles?!
How many think ANYONE in Detroit is serious about zero emission cars?!
This is all very sad.
“more domestic content than any other car sold in America” Thank you that was the phrase i was looking for the other day when i said i would chose the model x over other BEVs coming out next year
Tesla should be allowed to sell without dealers if they want to, as the sales volume and cars sold increase, they may want their own dealerships with service centers. Doing recalls at charge stations seems inadequate.
This is just sickening…
Can Tesla bring the state to court over anti-competitive laws? And seek punitive damages? (For reference, they can sue my state too…)
Tesla Motors just needs to focus on the other states. Michigan will fold once all the other states come onboard.
The laws of economics will drive Tesla to local dealerships eventually. Right now Tesla is making the only really modern car in the world, and they can’t make enough of them to meet demand. It will happen about the time when Tesla starts to advertise. Right now though, the corporate website sales model is cheapest and easiest. When people start haggling and the Tesla obsolete used cars start to pile up, dealerships will be welcomed.
Would you please explain why Tesla would be driven to dealerships?
Why can’t Tesla sell through their own stores and do repairs/maintenance in their own shops? Where’s the added value of a dealership?
Tesla has no need to haggle with buyers. In fact, most people absolutely hate the haggle model of car purchasing. And their used cars piling up? Come on.
How can the people of Michigan abide such arrogance?
not much choice they have a lot of money to throw at lawmakers
Post Capitalist America, naked to reality! Michigan has how many oil wells? We will watch the rest of Michigan industry crippled by this protectionist mentality go the way of Detroit City and for the same sick logic.
Digital cameras killed Rochester and Kodak. Better electric cars will kill the Asian Invasion of piston engined cars. You can fight this or you can jump out in front of it and lead. P.S. Very cheap, very well built, Chinese Buicks coming at you next year. The year after, Chinese electrics. Keep in your American Entitled minds: IMF recognized the communist Chinese Yuan this year. Time are so changing.
Warring for oil no longer practical for the U.S.A. Time to get out ahead of the electric vehicle onslaught (China exports electric busses to U.S. as we speak) and encourage American Science and technology to become forefront in this development.
Why not buying online?
As the German Managermagazin reports there are Tesla cars (Model S 85D) available for half the list price:
http://www.manager-magazin.de/unternehmen/handel/tesla-model-s-mit-50-prozent-rabatt-a-1067726.html#ref=rss
The Swiss online auctioneer :
http://www.qoqa.ch/de/offer/wow/10726
According to the press 100,000 people tried to get one of the 20 Model S which were available, they are sold out now.
But another batch is now for sale at the same price of 51,900 Swiss francs, see link above.