Tesla sues MI over dealership law — Business Digest

Governor Rick Snyder and other state officials are being sued by Tesla.

The automaker sues the state runners after the final verdict on September 15 that MI law states the automakers are forbidden to conduct the direct sales model. Essentially the argument rejects Tesla’s attempt to be its own franchisor, despite having no third-party franchisees with which to compete.

Tesla says the MI law violates its constitutional right to due process and equal protection, as well as restricting interstate commerce.

Though the lawsuit, Tesla seeks for the entitlement of a “vehicle dealer license” and maintain rights under the United States Constitution to retail and service its cars in the territory. The California-based automaker has also accused General Motors of pressuring legislators to adopt the ban. Tesla said it was a monopolistic strike at the upstart company, which has no traditional dealerships.

“Unfortunately, the local auto dealers and local manufacturers have made clear that they oppose any law that would allow Tesla to operate in Michigan”, Tesla’s statement said.

“The lawsuit was filed less than a week after Johnson rejected Tesla’s application for dealership and service facilities in Grand Rapids”, the Free Press said.

Luxury electric auto maker Tesla Motors Inc.

The legal action comes after the state officially denied Tesla a new dealership license last week. The bill was backed by the Automobile Dealers Association of MI as well.

In the fall of 2015, Tesla had applied to the state of MI for the license to open a retail gallery in Grand Rapids.

“For consumers, new-car franchises create intra-brand competition that lowers prices; generate extra accountability for consumers in warranty and safety recall situations; and provide enormous local economic benefits, from well-paying jobs to billions in local taxes”, according to the National Automobile Dealers Association.

Tesla hopes to launch its Model 3 next year, a relatively affordable auto that gets more than 200 miles on a single charge. The automaker has said 373,000 customers have paid to reserve Model 3 cars.

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At most, the governor said in the statement, the new law “clarifies the existing requirement in MI law”. “Tesla’s sales model has focused on educating consumers about its products and technology in a low-key, low-pressure environment”.

Tesla now operates stores in 23 states and the District of Columbia.