Tesla Sues State of Michigan Over Its Right to Sell

Tesla is taking the offensive with its direct-to-consumer battle in Michigan. Elon Musk’s electric car company has filed suit with the Western District Court of Michigan over its ability to sell and service its cars directly to consumers in the state. Reported first by Elektrek, the suit follows a rejection of the company’s application for its own dealership license.

Tesla is Losing the Dealership Battle in Missouri

In a majority of U.S. states, auto manufactures must rely on a legislative network of dealers, the third party who takes care of the sales and services of the vehicles. In its crusade to own the car purchasing experience, and reduce the end cost, Tesla is attempting to bend the traditional model, and in so doing has faced significant opposition at the government level.

In most cases, Tesla owns and operate showrooms where potential customers can experience the cars in person, though cannot directly purchase the cars. They are instead directed to the online store to make the purchase. In this case, Michigan is preventing Tesla from even opening said showroom.

Tesla has filed suit against named defendants Secretary of State and Chief Motor Vehicle Administrator, Ruth Johnson, Michigan’s Attorney General, Bill Schuette, and Governor Rick Snyder and is demanding a jury trial and to expedite the proceedings. Following strong lobbying from the the dealership associations and some automakers including Michigan, the actual law was signed into an amendment in 2014, clarifying the sate’s position that automakers may not sell directly to consumers through third-party dealerships.