Tesla Suing Michigan After State Officials Reject Company’s Bid To Open Dealership

Image courtesy of Atwater Village Newbie

After Michigan denied Tesla Motors’ application for licenses to sell directly to consumers, the company has filed a lawsuit against the state, challenging a law that says automakers can only sell through franchised dealerships.

Calling the “anti-Tesla” law unconstitutional, Tesla filed the federal lawsuit [PDF] in the U.S. District Court Western District of Michigan Southern Division, Fortune reports

Last week, Michigan officials put the kibosh on Tesla’s application for a Class A license, filed back in February, which would’ve let the automaker to make direct sales with its own dealership.

Tesla says Michigan’s 2014 law explicitly banning the company from selling directly to consumers was passed to give auto dealers a state-sponsored monopoly on car sales. That law 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.

“As a result of this law, Michigan consumers are forced to accept reduced access to the products they want, less competition and higher prices,” Tesla said in a statement, adding that it will now “fight for the rights of Michigan consumers to be able to choose how they buy cars in Michigan.”

The company says it’d rather resolve things with legislation, but is now forced to take the issue to the courts as state lawmakers have said there will be no hearings on the matter.

“Unfortunately, the local auto dealers and local manufacturers have made clear that they oppose any law that would allow Tesla to operate in Michigan,” the company said in a statement. “Given their position, the leadership of the Michigan legislature recently informed Tesla that it will not even hold a hearing to debate the issue. As one leading legislator told Tesla: ‘The local auto dealers do not want you here. The local manufacturers do not want you here. So you’re not going to be here.’ ”

Tesla Is Suing the Home of the U.S. Auto Industry [Fortune]