The company has been successful in gaining the right to sell cars in other states, most of which have some form of dealer franchise laws. Most existing regulations aim to prevent an automaker from competing with its franchisees, however Tesla has argued for an exemption since it does not have a franchise network and consequently does not violate the spirit of the laws.
The debate has been mostly shrugged off by legislators in Michigan, the home state of the Big Three automakers that may view the California-based startup as a potential threat. GM has spoken out against direct sales, arguing that all automakers should operate under “the same rules,” while Ford has called for a “level playing field.”
“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 Tesla’s VP of regulatory affairs, Jim Chen, in an interview with The Detroit News. “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?”
Even the Federal Trade Commission has criticized such restrictions, pointing out that Michigan legislators recently moved to grant a direct-sales exemption for three-wheel vehicles.
“Automobile manufacturers have an economic incentive to respond to consumer preferences by choosing the most effective distribution method for their vehicle brands,” FTC officials wrote in a letter to Michigan State Senator Darwin Booher.
Tesla representatives and lobbyists will be meeting with legislators, offering test drives and arguing their position ahead of next year’s legislative session in Michigan.
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