Carmakers Following Tesla's Direct Sales Model Face Ban From Michigan Car Dealers

Michigan car dealers are trying to thwart EV makers such as Rivian and Lucid, who wish to follow Tesla's lead by selling their cars directly to consumers and service them in the state. 

On September 16, House Bill 6233 (2020) was introduced that would block any manufacturer other than Tesla from selling cars to customers without a dealer as an intermediary, and from owning and operating maintenance and repairs in Michigan, Bloomberg reported.

Initially, Michigan's bill was an attempt to cripple Tesla's sales model by bypassing dealerships. Tesla was forbidden to sell its vehicles directly to consumers or to service any of its vehicles in Michigan.

In October 2014, Rick Snyder signed a bill banning direct sales of new cars. The big three automakers including Ford, GM, and Fiat Chrysler United States subsidiary—all headquartered in Michigan—were reported to have lobbied for the 2014 law that restricts Tesla's ability to sell in the state.

After years of litigation, Tesla and Michigan later reached an agreement that allows the company to deliver its vehicles to buyers in the state. The position of Attorney General also allowed Tesla to indirectly own service centers in Michigan through a subsidiary.

Tesla reaches agreement to sell directly & delivery EVs in Michigan https://t.co/wifmAIJmaQ pic.twitter.com/F8FXyuJFrw

— Tesmanian.com (@Tesmanian_com) January 22, 2020

However, this agreement only applies to Tesla, and did not change the state's law prohibiting direct sales in any way. The new House Bill 6233 (2020) aims to remove any ambiguity. 

“This is a bullseye on Rivian and Lucid and any EV manufacturer that would come in after Tesla does,” said James Chen, Rivian’s vice president of public policy. Auto dealers are “protecting a monopoly through legislation.”

Nevertheless, Tesla has spent a lot of time and money earning permission to deliver its cars directly to the residents of Michigan, a feat that deserves much respect. The company has remained true to its principles at all times and has become a pioneer despite the many hurdles posed to it by car dealers, combustion engine car manufacturers, and those with an interest in sustaining oil and gas production. For those who want to follow Tesla's example, it is also necessary to prepare for a similar fight.

© 2020, Eva Fox. All rights reserved.

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Article edited by @SmokeyShorts, you can follow him on Twitter