Mich. Governor Signs ‘Anti-Tesla’ Bill
LANSING, Mich. — Michigan Governor Rick Snyder signed into law on Tuesday legislation that adds tighter restrictions on direct-to-consumer vehicle sales. The move effectively bans Tesla Motors from selling vehicles in the state.
Introduced in May, House Bill 5606 originally focused on prohibiting auto manufacturers from dictating what fees a franchised dealer can charge customers. But thanks to a procedural loophole, state lawmakers were able to toss in a last-minute amendment without public comment or debate. And that amendment reinforces a ban on selling vehicles directly to consumers.
The “Tesla Motors Team” reacted the day after the state legislature approved the legislation on Oct. 15. The electric-car maker called the bill a “raw deal,” writing that the last-minute change created an “effective prohibition against Tesla operating in Michigan. The company added that the move was a continuation of the “anti-competitive behavior” the company faced in New Jersey and Missouri.
“By striking a single, but critical word from … the law governing franchise relations in Michigan, the dealers seek to force Tesla into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers,” Tesla stated in its blog post.
Gov. Snyder, however, said Tesla misunderstood what the new law does.
“The bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan,” Snyder said in a press release. “This is already prohibited under Michigan law.”
The last-minute amendment deleted the word “its” from a sentence in the existing law. A press release from the Governor’s office said that the change was made to allow manufacturers who don’t have their own franchised dealers to sell through another manufacturer’s dealer network.
Snyder added that lawmakers should discuss the current business model to determine if it was good for the state’s consumers.
“We should always be willing to re-examine our business and regulatory practices with an eye toward improving the customer experience for our citizens and doing things in a more efficient and less costly fashion,” said Snyder.
General Motors issued a statement yesterday in support of the legislation, saying the new law would "provide stability and support for our dealers.”
"Further, it will ensure we compete under the same rules in the marketplace as other automobile manufacturers," GM stated.
Tesla officials could not be reached for comment.
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →