Michigan governor hit for signing bill barring Tesla’s direct auto sales

Article by Andrew Christian, on October 28, 2014

A bill that disallows direct sales of vehicles in Michigan has been signed into law, effectively closing the doors for Tesla Motors to sell without going through dealers. The signing of the bill marks another loss for the electric carmaker, which has been experiencing some wins and some defeats in different states in its bod to sell directly to consumers.

The state’s governor, Rick Snyder, received some flak for signing the bill -- especially that he was once connected with a PC maker that sells directly to consumers. Since he is up for reelection this fall, Snyder could not help but take some hits on his decision to sign the bill.

One of those who blasted Snyder was Detroit billionaire Dan Gilbert, founder and chairman of Quicken Loans. He remarked that if one has a philosophy, he needs to adhere to it and not net personal circumstances compromise it.

He also told auto dealers supporting the legislation to man up and “compete like everybody else does.” While Tesla's direct-sales model was already banned in Michigan, the wording of its franchise law poses a flaw that the carmaker could possibly exploit -- just like what occurred in Massachusetts.

The signing of the bill effectively closes the door to Tesla. Snyder, however, remains adamant, saying that the signing of the bill was a reaffirmation of strengthening existing Michigan law.

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