http://uncovermichigan.com/content/21550-michigan-considering-sales-ban-tesla-motors

Michigan considering sales ban on Tesla Motors

Governor Rick Snyder is considering signing a bill (House Bill 5606) that would ban Tesla Motors from direct selling of electric cars in the states. The bill has already been cleared by the lawmakers in order to protect the local automobile dealerships. The governor has until October 21 to sign the bill.

Tesla faces similar ban in some other states as well. Tesla Motors argues that the company reduces the cost paid by consumers by direct selling. Automobile dealers associations have opposed the move by Tesla Motors as it would have a major impact on their sales and margins.

The bill does not directly names Tesla Motors but it will have a major impact on the local automobile dealerships. The bill could also prompt other states to adopt similar measures to stop Tesla Motors from direct selling.

In an official post on its website, Tesla said, �By striking a single, but critical, word from MCLA 445.1574(14)(1)(i), the law governing franchise relations in Michigan, the dealers seek to force Tesla, a company that has never had a franchise dealership, into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers.�

Tesla Motors has asked consumers to directly call Governor Snyder�s office and express their concerns, in a statement posted on its official website. Telsa faced similar situation in Texas, New Jersey, New York, Arizona and Georgia. The company has resolved the issue in some of the states.

Tesla operates its own galleries and showrooms. The company also accepts orders online. The move saves the money paid as commission to car dealerships.

I am not very familiar with the Commerce Clause. What does it prevent? Tesla from direct selling, or state legislatures from passing laws to prevent direct selling?

The stated purpose is to "regulate commerce" or in modern parlance "to make commerce regular", preventing states from preventing the sales of products from other states within their boarders.

A proper application the the Commerce Clause would be to slap down Michigan's anti-capitalist behavior.

They wrote the auto sales laws so there would be authorized dealers and service centers in every state.

Then when you have problems, your closest help isn't in another country

Tesla wants to change the rules all the others have played by for many years

They aren't doing it to save the customers anything.

They do it to save themselves the cost of building and licensing dealerships in each state, and paying the taxes


If the state were tying to pass some pro gun laws, you'd all be saying the FEDS have no business telling the states what to do.

Way back when, the colonies would make sweetheart deals with each other to further their own interests to the detriment of some colonies and the 13 as a whole. The intent of the Commerce Clause was to insure free and fair trade among the colonies. The Tesla case is a good illustration.

IIRC the rationale behind requiring in-state dealerships was to insure parts and service availability. Sorta made sense in relatively ancient times but not now with modern logistics. Now it's primarily to force someone like Tesla to invest money in a state's economy. (And guess where Tesla would get the extra bucks.)

Of course that's not what the Commerce Clause means anymore.

dealerships mostly just skim more money and provide little benefit these days.

How much "benefit" would Tesla provide with one or two dealer locatins per state?

The nearest one to me is about 150 miles.

The Constitution has the commerce clause (even though it's been grossly brutalized) to prevent states from doing what Michigan is doing.

The Constitution also has the second amendment to prevent the federal government from restricting gun rights. And the tenth to prevent it from interfering in states passing pro gun laws.

You're right. We recognize both Michigan's abuse of the commerce clause, and the states rights to pass pro gun laws, according to the constitution.

So what's your complaint?

Luckily, no one has forced you to buy their product. The government will keep you safe.

I thought it was pretty clear
You either want the FEDS to dictate to the states, or you don't

I want the feds (and the states) to follow the constitution.

And our local dealerships were shut down - so I have to go 70+ miles for parts OR support!
Instead of GM sending me a washer and clip for a door handle - I have to buy the whole assembly!
This is a better scenario in what way?

I hope Tesla wins - and rebuilds a service mentality in the auto business!

Lots of history in the laws mentioned above. These types of laws were written almost a century ago to protect dealers from the abuses of the auto companies. Apparently the auto companies didnt give a rats backside about thier own dealerships and really put the screws to them way back when. It isn't and never was for the customer or parts availability. The laws probably should change, but the special interest of the dealers and the enormous sums of cash at thier disposal doesn't makethe any change seem likely.

I have a novel idea - How about if you don't like Tesla's sales strategy, you buy from someone else?

yep. that decision should be made at the consumer level, not state government.

I believe that's an archaic concept called "freedom".

Politicians probably figured out that they could get more campaign donations from dealers than from the few manufacturers. I'll bet they still milk it today.

That has nothing to do with the actual topic

Why should Tesla get different rules than all the others?

The commerce clause is about making it the SAME for everyone

Wouldn't the answer then be to repeal stupid laws, rather than making them more restrictive?

Unless, of course, you're scared to go out without government protection.

The answer is for businesses to all play by the same rules.

A foreign company shouldn't get any special deals