Tesla has applied for a dealership license in Michigan
What’s the old adage? If you can’t beat them, join them? Well, it seems that’s exactly what Tesla is doing. The upstart EV automaker has applied for a dealership license in Michigan.
This is a change, of course, for Tesla because, up until now, it has been selling its cars around the country in company-run showrooms that sell direct to customers — thereby circumventing the dealership model. However, in 2014 Michigan Gov. Rick Snyder signed a bill into law that banned direct sales of vehicles, closing the loophole Tesla has been exploiting around the U.S. to avoid opening dealers.
“Tesla is committed to being able to serve its customers in Michigan and is working with the legislature to accomplish that,” A Tesla spokesperson told Mashable. “The existing law in Michigan is very harmful to consumers. Tesla will take all appropriate steps to fix this broken situation.”
The difference between what Tesla is doing and, say, how Chevrolet sells cars is that, rather than having a dealership owned and operated by an independent company, Tesla doesn’t have a middleman hawking its cars. This allows it to control and streamline the experience and avoid the grossness of a normal dealership — think old coffee and popcorn machines.
The dealership license Tesla has applied for is a “Class A” license that requires the company to sell both new and used cars as well as offer a repair facility.
Rather than turning over the reigns to an unknown entity, Tesla could have a former employee open a franchise dealership. This person would likely be required to operate the dealership just like a current Tesla direct-sales store. Though the company has applied for a dealer license, it isn’t happy about the direct-sales ban and still aims to fight it.
“As recently amended, current Michigan law prohibits Tesla from being able to license its own sales and service operations in the state,” A Tesla spokesperson said. “Submission of the application is intended to seek the Secretary of State’s confirmation of this prohibition. Once confirmed, Tesla will review any options available to the Company to overturn this anti-consumer law.”
The decision on Tesla’s application could take several months. No matter how the decision comes down, however, it seems Tesla isn’t done fighting the direct-sales battle.