Michigan Governor Rick Snyder who bragged about making Michigan more hospitable for entrepreneurs is deciding whether to veto or sign Michigan Bill HB 5606 into law until next Tuesday, October 21.
Michigan Bill HB 5606, forbids automakers from selling the car directly. Although Tesla Motors was not mentioned clearly by name, the law if approved may ban electric car maker, the Tesla motors.
Tesla doesn’t possess any sales outlet in Michigan. The company is selling their vehicles only through franchised dealership network.
The provision appended to the step that was taken last May. The measure standardizes the fees car dealers charge customers during the whole car-buying documentation process. The amendment was placed on the bill on Oct. 2, right before it was passed by the state legislature.
Diarmuid O’Connell, Tesla’s vice president of business development said, “This amendment was put in last-minute, under the cover of darkness, probably with a calculation that it would be much more difficult (to pass) in a public debate in the light of day. There is a basic issue of fairness here; we didn’t have an opportunity to come and debate this bill.”
Tesla, begun in 2003 and operates from its headquarters in Palo Alto, Calif., The nearest dealership is located in Columbus, Ohio which is about about a four-hour drive from Ann Arbor. The company recently revealed its Model D and a flock of new features. Tesla’s stock traded up about 2.5% Friday morning, at $232.00 in a 52-week range of $116.10 to $291.42. Despite not having dealers, there are 50 Tesla registered owners in Michigan according to IHS Automotive. A Model X, a more versatile and economical alternative to its pricey Model S is on the list for Tesla Motors next year which starts at about $75,000 and can run well above $100,000.
Under current law a manufacturer may not:
Sell any new motor vehicle directly to a retail customer other than through its franchised dealers, unless the retail customer is a nonprofit organization or a federal, state, or local government or agency.
The amended version in process to be accepted says a manufacturer may not:
Sell any new motor vehicle directly to a retail customer other than through franchised dealers, unless the retail customer is a nonprofit organization or a federal, state, or local government or agency.
Just to notice the amended law strikeout the word “its” franchised dealers, which according to Tesla means that a company require to sell its cars through an existing dealer.
Right now Arizona, Texas and Virginia has enforced the law of direct sales ban while Colorado has limited the manufacturer to one location and New Jersey is under process.
“One of the things that was added to the bill was a section that states this law applies to all manufacturers. There’s no creation of new rules,” commented Terry Burns, executive vice president of the MADA. “If a manufacturer wants to come in and sell cars in the state of Michigan, they should probably follow Michigan law.”
“People don’t introduce bills unless they intend to change the law,” Todd Maron, Tesla’s general counsel said. “Secondly, people don’t sneak language in at the last minute unless they know it will be consequential.”
Dave Murray, Snyder’s deputy press secretary, said the governor’s office was “doing their due diligence and looking at it very closely” but has not made a decision.
The judicial court of Massachusetts last month has given a ruling that Tesla can keep selling it’s products from a shopping mall in Boston. If any ban is imposed Tesla may knock the same judicial court.