Tesla is calling HB5606, a bill that was passed by the Michigan state legislature and is currently sitting on Gov. Rick Snyder’s desk, a “raw deal.”
Snyder has until Tuesday to sign or veto the legislation. If he signs HB5606 into law, Tesla will be prohibited from opening a store in the Great Lakes State.
“This amendment goes even further,” Tesla adds. “It also seeks to prevent Tesla from operating a gallery in Michigan that simply provides information without conducting sales. We could even be barred from telling people about our car.”
Dealer franchise laws are often designed to prevent manufacturers from opening their own car lots and underselling their dealers. Due to the small number of cars it produces and the auto’s unique features, Tesla wants to sell directly to its customers in many states.
According to the Wall Street Journal, these franchise laws have protected car dealers from the competitive online sales arena that has hurt traditional book stores, like Borders.
Tesla, on the other hand, says that the franchise laws shouldn’t prevent the automaker from selling directly to its customers because they have never had franchised dealers like the more traditional automakers.
Tesla accused the Michigan Automobile Dealers Association, which helped get HB5606 passed, of trying to monopolize the marketplace.
“This anti-competitive behavior mirrors similar tactics in New Jersey and Missouri, where dealers have resorted to backroom political maneuvers to shore up their monopolies,” Tesla argues. “The dark-of-night tactics highlight the dealers’ concerns that their arguments don’t stand up well to public scrutiny.”
Tesla urged its supporters to contact Gov. Snyder and “urge him to veto [HB5606] and return the issue to the legislature for a full and open debate in 2015.”
