Michigan, at the Behest of GM, Targets Tesla With Ban on Direct Car Sales

Republican Michigan Gov. Rick
Snyder reminded us all today who actually controls his state by
signing House Bill 5606 into law. The law emphasizes an existing
state ban that
prohibits car manufacturers from selling vehicles directly to
consumers, but this new bill apparently
adds more rules and regulations. Though it doesn’t mention
electric car manufacturer Tesla by name, everybody grasps that they
are the target.

General Motors declared support for the law, which they insist
makes sure all car manufacturers follow the same rules. Funny, they
could also accomplish the same by completely dumping the
regulations, which protect car dealerships for no rational public
purpose. Remember the rule: If some big business claims a law will
create a “level playing field” in the marketplace, you can count on
it favoring them at the expense of somebody else. Needless to say,
Tesla isn’t impressed:

What’s good for GM’s customers is not necessarily good for
Tesla’s customers. What’s good for gasoline cars is not necessarily
good for electric cars. Tesla is selling a new product with a new
technology. The evidence is overwhelming that a traditional
dealer-based approach does not work for electric cars. Moreover, GM
distorts the purpose of the franchise laws (including in Michigan),
which are in place not to cement a monopoly for franchised dealers
but rather to prevent companies with existing franchises from
unfairly competing against them. Tesla has never used franchised
dealers, so these concerns are simply irrelevant. It’s only through
the last-minute amendment to HB 5606 that Michigan law would be
distorted into something entirely different.

Auto blog Jalopnik has more information
here. Tesla claims the lengthy bill would even ban them from
having showrooms in the state.

Previous Reason coverage of protectionist efforts to block Tesla
sales can be read
here, and
here.