Michigan Denies Tesla Request to Open Dealership
September 15 2016 - 6:24PM
Dow Jones News
By Tim Higgins
Officials in Michigan have rejected Tesla Motors Inc.'s request
to open a company-owned dealership, a move that indicates the home
state for Ford Motor Co. and General Motors Co. will stick to its
ban on selling new cars directly to consumers.
The Michigan Secretary of State's office this week ruled against
the Silicon Valley electric car maker's selling vehicles in the
state without using franchised dealers. Gisgie Dávila Gendreau, a
spokeswoman for the office, confirmed the state's decision Thursday
in an e-mail.
Tesla has been seeking an application for a new auto dealership
license in Michigan, one of several states to continue banning
direct sales of automobiles by manufacturers.
"The license was denied because state law explicitly requires a
dealer to have a bona fide contract with an auto manufacturer to
sell its vehicles," Ms. Dávila Gendreau said. "Tesla has told the
department it does not have one, and cannot comply with that
requirement."
The Palo Alto, Calif., company filed an application last
November for permission to open a dealership and service center in
Michigan with the Secretary of State, which handles dealership
licenses.
Tesla has for years been trying to steer around state franchise
laws so it can set up its own retail locations, but it has faced
intense resistance from franchise automobile dealerships and auto
makers.
Dealership owners carry heavy sway among state lawmakers, often
arguing the auto maker would unfairly cut out the middleman with a
business model that involves selling directly to customers.
A spokeswoman for Tesla didn't immediately respond to a request
to comment. Previously, the company has said a formal denial in
Michigan could prompt it to pursue additional legal avenues. A
hearing officer's decision may be appealed to the court.
The Detroit News earlier reported the ruling, which was dated
Sept. 12 and followed a hearing held Sept. 7.
(END) Dow Jones Newswires
September 15, 2016 18:09 ET (22:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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