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Tesla Files Lawsuit Against Michigan Over Dealership License

Tesla cannot sell cars in Michigan, and the situation has gone too far for the automaker.
Tesla Model S key fob 1 photo
Photo: Tesla
Months of waiting to receive approval of an application for a dealership license ended up in a rejection from Tesla at the Michigan Secretary of State office. This seems to have been the last straw for Tesla, as the company has filed a lawsuit against the state.

According to Electrek, the plaintiff wants to “vindicate its rights under the United States Constitution to sell and service it all-electric vehicles at Tesla-owned facilities in Michigan.

In other words, Tesla wants to be allowed to own a dealer network in the State of Michigan, where it wants to be allowed to service and sell its models.

The lawsuit filed by Tesla is an important legal battle, because Michigan is the American state with the biggest population that does not have a single Tesla store or service facility, which is an evident impediment for potential customers and existing clients.

Tesla wants the whole nine yards on this action, as it requested an expedition of the proceedings and a jury trial was demanded. The automaker was banned from established service facilities and stores in the state in 2014, after Governor Rick Snyder, included a revision to the law that was supposed to “clarify” the state’s position on automakers employing a direct sales strategy without third-party dealerships.

The bill mentioned above arrived after automakers lobbied against Tesla’s business model, which focused on direct sales instead of third-party dealers. Michigan is not the single state that has a ban on the direct sale and service of automobiles, but the state does have the worst policy when Tesla’s business model is concerned.

Tesla built a store and service center in Detroit and then applied for a dealership license regardless, and the rejection that came last week led the company to the legal action against the State of Michigan.

The ban is so strict that Tesla cannot even perform service and maintenance work on its vehicle in the state, which is an impediment to over 400 customers that reside in Michigan.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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