Michigan Bans Sale of Teslas

Gov. Rick Snyder became the 4th governor, all of them conservative Republicans who claim to love free markets and hate “big government” (Jan Brewer in Arizona, Rick Perry in Texas, Chris Christie in New Jersey) to ban the direct sales of Tesla automobiles because they don’t go through dealerships as middle men.

Gov. Rick Snyder on Tuesday signed a bill that strengthens a law banning automakers — including Tesla Motors Inc. — from selling vehicles directly to customers in Michigan.

Snyder said the bill, which also prohibits automakers from telling dealers how much to charge in documentation fees, “clarifies and strengthens” an already-existing law that prohibit direct sales in the Great Lakes state.

“This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan — because this is already prohibited under Michigan law,” Snyder said in a letter to lawmakers that accompanies the signed bill.

Tesla has contended that Michigan law would allow it to sell directly in the state, since it doesn’t already have franchised dealers here. However, the Michigan Automobile Dealers Association, which told The Detroit News it had a hand in adding a direct sales amendment to the bill, says it believes Tesla cannot legally sell cars here now.

Language in the bill says a manufacturer can only sell new vehicles to consumers through its own network of franchised dealers.

Thank you, Gov. Snyder, for bravely protecting Michigan residents from the dangerous scourge of more energy efficient cars. But hey, whatever happened to all that rhetoric about the glory of free markets and competition? And how government shouldn’t pick winners and losers? I guess that only counts unless the big automakers and their dealers want to protect themselves from competition they can’t beat fair and square — and, of course, are willing to donate tons of money to Republican politicians to get it done.

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  • http://en.uncyclopedia.co/wiki/User:Modusoperandi Modusoperandi

    They’re for competition, but already had it. Dealers won.

    And the Market is Free. To play by the rules set by the winners.

     

    Really, Ed Bratyon, this is basic economics.

  • John Pieret

    Hey! Let’s hook up Adam Smith’s grave to a dynamo. Spinning that fast it could produce at least half of Great Britain’s electricity needs .

  • http://www.facebook.com/profile.php?id=667105592 barbaraeckstein

    In all fairness, both parties in both the senate and the house voted almost unanimously to keep Tesla out. Only one senator voted against. So even if Snyder vetoed the bill (which he wouldn’t probably in any case) his veto would not likely stand.

    The issue is that the National Automobile Dealers Association has too many politicians in their pocket. The NADA blocked Tesla from selling cars in Michigan by buying our representatives. Snyder is just one of many.

    One republican voted against the bill. All other republicans and ALL democrats supported the bill. I don’t think you can hang this on Snyder, even though it feels good to do so.

  • http://www.facebook.com/profile.php?id=667105592 barbaraeckstein

    Correction: one republican representative, not senator voted against the bill:

    http://www.michiganvotes.org/RollCall.aspx?ID=696513

  • dshetty

    In India , we are used to our fair share of corruption – but it surprises me when the USA has actually legalised bribery and the politicians here can do this sort of thing officially

  • John Pieret

    dshetty:

    it surprises me when the USA has actually legalised bribery and the politicians here can do this sort of thing officially

    It’s part of American Exceptionalism.

  • Akira MacKenzie

    I guess that only counts unless the big automakers and their dealers want to protect themselves from competition they can’t beat fair and square — and, of course, are willing to donate tons of money to Republican politicians to get it done.

    Also don’t forget the weird antipathy that the right-wing holds toward fuel efficient, hybrid, or pure electric cars.

  • http://www.ranum.com Marcus Ranum

    Because it’s totally a free market conservative thing!

  • http://www.ranum.com Marcus Ranum

    it surprises me when the USA has actually legalised bribery and the politicians here can do this sort of thing officially

    Are you one of those “hate us for our freedoms” types?

  • http://www.clanfield.net janiceintoronto

    Tesla, Tesla. Hmmmmm, sounds Russian. Probably some kinda commie car.

  • Donnie

    So, Telsa sets up a dealership through Amazon and Amazon delivers a brand new Telsa…..neither drone nor prime shipping applicable. It is a dealership.

  • Chiroptera

    Akira MacKenzie, #7:

    Heh. Oh yeah. I remember how ballistic they went when they were going to be forced to buy light bulbs that would save them money.

    Conservatives sure are weird. They don’t like light bulbs taht save money. Bakers don’t want to sell cakes. Photographers don’t want to make money taking pictures. I guess this goes right in with their idea of fixing the economy by increasing defense spending while cutting taxes.

  • elvenpiratefish

    Just going to play devil’s advocate on this. 48 states have laws on the books prohibiting motor companies from owning their own dealerships and selling directly to consumers. The justification for the laws when they were written was to promote competition in the dealer industry and prevent price fixing. The idea is that say Ford can’t operate it’s own dealerships and monopolize the dealership industry and allows for the multiple different dealerships for the same brand competing for your business (and in theory causing the prices to be lower or give consumers more negotiating power). There was a story about a similar problem for Tesla in Virginia in the Washington post a little more than a year ago about it.

  • colnago80

    There was an article in the Detroit News yesterday or the day before that opined that this was not about Tesla, which is hardly competing with the other automakers, being that its cheapest car sells for 65 grand. The other automakers are really worried about competition from China which would be tempted to do the same thing if Tesla prevailed. Most states have the same law in place, with the notable exception of Nevada, which was one reason why CEO Elon Musk decided to build his multibillion dollar battery plant in that state (the other being that the only US lithium mine is located in Nevada).

    However, AFAIK, none of these laws prevent a Tesla purchaser from registering the car in any of the states where they are in force. So, for instance, if someone in Virginia wants to purchase a Tesla, there is nothing stopping him/her from buying the car in a state where such sales are legal and driving it (or having it shipped) back to Virginia and registering it there. I have seen two Teslas in Northern Virginia so far and they were both registered in Virginia.

    By the way, I’m sure that the blogs resident real estate developer will be along to give his view of his hero, Governor Snyder.

  • eric

    @11:

    So, Telsa sets up a dealership through Amazon and Amazon delivers a brand new Telsa

    Yeah I was thinking something similar. Have the dealership be one guy with a computer. You do your shopping on line as per normal, it gets sent to him. You go into his office and you both click a “submit” button. Pay him an on-call amount or $20/hour or something.

  • eric

    The idea is that say Ford can’t operate it’s own dealerships and monopolize the dealership industry and allows for the multiple different dealerships for the same brand competing for your business (and in theory causing the prices to be lower or give consumers more negotiating power).

    If that was the concern, the law should say Tesla must allow dealerships in addition to direct marketing. It would not say Tesla must use dealerships instead of direct marketing.

  • elvenpiratefish

    @14 you can buy Tesla’s in DC and MD currently, many of the state laws have rules for an exemption if the manufacturer has done due diligence in trying to find people interested in recruitng a franchise dealer but cannot find any interest in the community (though in the case of Virginia the people in charge of approving said exemption has been slow rolling the approval). I’m sure part of the reason is that the dealership owners are afraid of putting themselves out of business and hate electric cars (since they don’t need oil changes or the like, see California EVs in the 90s), so none of them want to start a tesla franchise.

  • colnago80

    Re elvenpiratesish @ #17

    As I understand it, the Tesla showroom at Tyson’s Corners can’t actually sell the cars, talk pricing, or deliver vehicles to prospective owners. They can give test rides to prospective buyers and discuss technical details about the cars. However, if DC allows Tesla to sell cars there, then prospective buyers in Northern Virginia can buy the car there and register it in Virginia.

  • whheydt

    One wonders if the FTC could interested in this law as a restraint of (interstate) trade…a Federal matter?

    (And, FYI, Tesla was born in what is now part of Croatia.)

  • http://www.facebook.com/robin.pilger Robin Pilger

    barbaraeckstein @ 3:

    “In all fairness, both parties in both the senate and the house voted almost unanimously to keep Tesla out.”

    This ignores that is was the GOP sponsors of the bill that sneaked in the last minute change to strengthen the Tesla ban. Yeah the Dems were asleep at the switch but it was dirty dealing by the GOP that got it through.

  • http://www.pandasthumb.org Area Man

    So, Telsa sets up a dealership through Amazon and Amazon delivers a brand new Telsa…..neither drone nor prime shipping applicable. It is a dealership.

    If it were that simple, the automakers would have utilized that loophole long ago. Being a car dealer requires a specific license, not just calling yourself a dealer. I don’t live in Michigan, but my next-door neighbor sells cars, and to get a dealer’s license, he had to go through an amazing amount of red tape, including having a physical car lot of a certain size even though he doesn’t need it to store inventory.

  • http://dailydouq.wordpress.com dailydouq

    The auto industry bigshots my pressure the Repugs but the UAW probably brought along the Dems – who says some things can’t be bipartisan. But it’s true that the Repugs have energy efficiency big time. Check out how Gov. Brownback of Kochsas was forced to cut back on wind power, despite it paying substantial royalties to the farmers there. In the dream state of the Kochs, now struggling with massive debt since Brownback cut taxes for the Kochs they want to show the rest of the country how great oil and coal are. Beside Tesla built their battery factory elsewhere and Elon, though rich, was attracted to go live in Kochsas to dodge taxes.

  • http://dailydouq.wordpress.com dailydouq

    sorry, Elon was NOT attracted to go live in Kansas

    and Repugs hate, not have energy efficiency

    the typo monster has my fingers under its control

  • lorn

    In the early days of the automobile the dealerships made a lot of sense. We are talking about a multifaceted new technology. Cars only made sense if you could get fuel, oil, service, repair parts, tires. In the early 1900s most mechanics were used to dealing with stream engines and horse drawn modes of transportation. The dealership, and the network of dealerships, were the edge of the social and economic changes that were to come.

  • anubisprime

    Elon recently suggested that his company will give Tesla technology away to the industry.

    That probably pisses off the avariciousness of Rethugs, cos it goes against everything they worship.

    Without doubt election funds from the automotive industry is a prime consideration although it is more likely that a certain fear has gripped their black and shrivelled hearts, what happens if other technologies are just ‘given away’…where will it all end because technologies are for exploiting the poor to pad the rich, all their future incomes are threatened by this foul and loathsome altruistic attitude.

    Besides Elon is involved in scientific advancement in space and that does not sound very godly.

  • Jordan Genso

    #20 Robin Pilger

    barbaraeckstein @ 3:

    “In all fairness, both parties in both the senate and the house voted almost unanimously to keep Tesla out.”

    This ignores that is was the GOP sponsors of the bill that sneaked in the last minute change to strengthen the Tesla ban. Yeah the Dems were asleep at the switch but it was dirty dealing by the GOP that got it through.

    It was my State Senator (Joe Hune) that added the amendment at the last minute. His wife is a lobbyist working for the firm representing the dealerships.

    http://www.livingstondaily.com/story/news/politics/elections/2014/10/21/hune-pollesch-dispute/17649455/

  • briandavis

    I wonder if Tesla could get away with selling their cars to a shell corporation in Nevada which would then register them there, and resell them to private parties are “used” cars?

  • dingojack

    But, but, but how is John Freshwater gonna burn crosses into the arms of his students…

    Oh wait. Never mind!

    Dingo

  • http://onhandcomments.blogspot.com/ left0ver1under

    It’s always amazing how capitalists strenuously hate capitalism.