Does Michigan's Tesla Ban Go Too Far? Patch Poll

Michigan became the latest state this week to ban direct sales of California-based Tesla Motor’s electric cars with a tough bill that prohibits the car maker from even talking with potential customers in the state about its cars.

Michiganders who want to buy the car will now have to buy them directly through a network of franchise dealerships under the bill signed last week by Gov. Rick Snyder, the Detroit Free Press reports.

The law doesn’t specifically mention Tesla, but Todd Maron, the car maker’s general counsel, said the law goes too far in banning the company from talking with consumers in person about the cars. “People don’t introduce bills unless they intend to change the law,” Maron said recently. “Secondly, people don’t sneak language in at the last minute unless they know it will be consequential.”

Snyder, who holds a slim margin over Democrat Mark Schauer in the upcoming general election, would likely have faced an onslaught of criticism from Detroit’s Big Three automakers if he hadn’t signed the legislation, said the Car and Driver Blog.

The blog called the General Motors-backed bill “the classic David-versus-Goliath tale, where Goliath wants the state of Michigan to take away David’s slingshot.”

The Auto Blog cited experts who agree the new law doesn’t change much in Michigan, because the state’s franchise laws already require that new cars be sold through dealerships, but it closed a gap that Tesla might have been able to exploit.

The new law deletes one word – its – from existing language that stated a manufacturer could only sell new vehicles to consumers through “its” own network of franchised dealers.

.Snyder defended the ban in a statement. “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,” he said.

“This change would merely allow manufacturers that do not have their own franchised dealers to sell through another manufacturer’s network of franchised dealers. They will be required, just as they are now, to sell through a franchised dealer, and not directly to consumers.”

At most, the governor said in the statement, the new law “clarifies the existing requirement in Michigan law.”

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Todd Maron, Tesla’s general counsel, told the Free Press the Michigan bill goes beyond requiring sales through a franchised dealer to prohibit the use of a gallery to simply display cars and communicate in person with consumers.

The Michigan bill was originally focused on franchise-dealership fees, but included an eleventh-hour amendment prohibiting direct-consumer marketing – Tesla’s preferred method of selling its cars. The amendment was sponsored by state Sen. Joe Hume, a Hamburg Republican representing Michigan’s 22nd District,.

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• Senator Gives Wife’s Lobbying Firm Backdoors Amendment to Ban Tesla: Letter to the Editor

Michigan joins Arizona, Iowa, New Jersey, Maryland, Texas and Virginia in either banning or restricting Tesla from selling to the public.

Photo: Tesla Motors