Tesla Applied For A Dealership License In Michigan

Michigan residents keen on purchasing a Tesla may no longer have to travel to Chicago, Ohio, Indiana, or Canada: Tesla has applied for dealership licenses to sell and service its electric vehicles in the state nearly two years after legislators passed laws banning the company’s direct-to-customer sales model. 

The Detroit News reports that Tesla applied for the “Class A” dealership license to sell new and used cars back in November, but recently submitted additional information to the Michigan Secretary of State’s office.

If the application is approved, Tesla would be required to open a “repair facility as part of their business or have an established relationship with a licensed repair facility.”

Secretary of State spokesman Fred Woodham tells the Detroit News that the department is currently reviewing the application and it could have a decision in the next month or two, noting that if approval is granted, Tesla could be selling and buying vehicles shortly after.

It’s unclear how Tesla would move forward if it’s granted the license. According to Michigan Information & Research Services Inc. (subscriber access only), the company could contract with anyone – except itself – to sell cars with the state’s dealership licenses.

That means it’s possible the company could send a former employee to the state to open a dealership with a franchise agreement that would mandate the same look and business practices as its current Tesla-run stores.

Tesla’s fight to sell its vehicles in Michigan began back in October 2014, when Governor Rick Snyder signed into law a bill that included an amendment explicitly banning Tesla from selling vehicles in the state unless it was through a franchised dealership.

Michigan law already required that anyone selling a car in the state do so through a dealership, but since Tesla had no retail operations in Michigan, it maintained that it wasn’t violating the law by allowing Michigan residents to buy their cars online.

The measure effectively shut the door on Tesla’s direct-sales approach in the state, meaning residents had to go out of state to buy one of the cars. That, or Tesla would need to make arrangements with franchised dealerships to sell their cars — a move that appears to be taking shape now.

Several months later, in May 2015, the Federal Trade Commission sent a letter to lawmakers in the state, urging them to consider repealing the ban.

The FTC staff contended that consumers would more fully benefit from a “complete repeal of the prohibition on direct sales,” noting that “consumers are the ones best situated to choose for themselves both the vehicles they want to buy and how they want to buy them.”

Currently, Tesla, which estimates it has about 400 customers in Michigan, has a small presence in the state through its Tesla Tool and Die Factory purchased last year, and four charging stations.

Tesla applies for Michigan dealership license [The Detroit News]