ELECTREK: Tesla loophole for direct sales in Michigan is getting shut with impressive political backstabbing

[FutureBoy]

Tesla loophole for direct sales in Michigan is getting shut with impressive political backstabbing


After years of fighting, Tesla thought it was safe from Michigan’s latest effort to prevent car dealers from having competition from new automakers, but now we learn that the state legislature is trying to shut Tesla’s legal loophole.



Michigan has been a battleground for Tesla when it comes to the right to sell and service its vehicles.

There are several states where Tesla has been banned from selling its vehicles directly to customers due to misused old laws meant to protect car dealers against their own automakers, and Michigan has stood out among them, as it’s the home of the US auto industry.

A change to the law in 2014 prohibited direct sales from automakers that blocked Tesla from obtaining a dealership license and selling cars in the state.

After legislature tried to change things in 2016, Tesla filed a lawsuit against the state, claiming that the ban on direct sales violates commerce laws, and that it was pushed by car dealers and GM in an attempt to block the electric automaker at the last hour.

It has since been a long legal process during which Tesla tried to prove that lawmakers were influenced by car dealers to specifically prevent Tesla to sell vehicles direct to consumers in the state.

Earlier this year, Tesla reached a settlement with the state of Michigan to allow direct sales and service of vehicles. Michigan didn’t officially allow Tesla to get a dealer license, but it is allowing Tesla to sell to and service customers’ cars in Michigan through legal loopholes, like registering cars from another state for deliveries and having a wholly owned subsidiary perform services.

Earlier this year, Electrek reported that the state legislature introduced a new bill that would make sure no other new automaker would get access to that loophole.

The new legislation was introduced after Rivian was looking to set up its own sale and service operations in the state.

At the time, even the Michigan Auto Dealer Association (MADA), who were unsurprisingly backing the bill, said that Tesla wouldn’t be affected by the new legislation.


Terry Burns, executive vice president of MADA, says that the agreement with Tesla didn’t change the law, and the new bill is clarifying that:

That settlement was based on a clear set of specific facts for a specific time.

However, we now learn that the language of the bill was changed at the last minute before it was approved by Michigan’s house.

Detroit News reports:

House lawmakers on Wednesday struck key language from a bill that would have enshrined a carveout for Tesla in Michigan’s ban on direct vehicle sales. Instead, lawmakers passed a bill 65-39 that appears to counteract Tesla’s January settlement with the state by banning vehicle manufacturers from directly or indirectly owning a motor vehicle repair or service center.

The new bill still needs to pass the state senate and be signed by the governor, but if it goes through, it could reverse the loophole put in place as part of Tesla’s settlement with the state.

Tesla opened a service center near Detroit earlier this year following the agreement.

Electrek’s Take
Let me get this straight.

Michigan passed a questionable law preventing Tesla from operating its sale and service centers in the state. Tesla tries to challenge the law at the legislative level, but it gets shut down by politicians who appear to be in the pockets of car dealers.

Then Tesla instead takes Secretary of State and Chief Motor Vehicle Administrator, Ruth Johnson, Michigan’s Attorney General, Bill Schuette, and now former governor Rick Snyder to court over the issue.

These bozos don’t like the heat and decide to settle with an official loophole allowing Tesla to operate.

A few months later, the legislature decides to close the loophole — basically invalidating the result of a three-year-long lawsuit.

This is nonsense, and I can’t imagine that it’s not the result of the US’ massive problem of money in politics.

There’s no other reason to support these kinds of laws other than wanting to play nice with car dealers, who are notoriously big financial supporters in politics at the state level.

Tesla, Rivian, Lucid, and any other automakers who never benefited from third-party franchise dealers investing in building a distribution network for them should of course be allowed to build their own distribution and service network and not be forced to work with third-party car dealers.

There’s no good argument against that.

Michiganders, if I were you, I’d vote out of office all of those politicians who are voting for this new bill — starting with Representative Jason Sheppard, (R-Temperance) who sponsored the bill. I am trying to find a list of the of the 65 house representatives, people who claim to be representing you, who voted for it. I’ll add if/when I find it.

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[FutureBoy]

So this just seems like Detroit is trying to keep itself alive but in the process is just going to solidify how badly it will lose. It's not like people enjoy going to dealerships. Much like hiring a lawyer, there are times it is unavoidable but for any other instance, most people I know stay away from dealerships at all costs. For a very short time, I actually worked on the sales floor of a dealership, and just mentioning that to someone was nearly grounds for them to end a friendship.

By having the Michigan state legislature block access to Michigan for Tesla or any other automaker that does not have a dealership network contract, there will be a short term saving grace to the dealerships in Michigan. Add this action to the list of grievances that people have about dealerships. Then consider that without a way for Tesla vehicles (or any other of the new EV company vehicles) to be sold in Michigan. In the next couple of years as the market changes over and everyone (OK, just most people, there will always be some die-hards) starts insisting on buying an EV the legislature is going to be forced to allow in these newer companies.

At that point, instead of having a gradual shift to EVs (like is happening in other states), Michigan is going to end up with a sudden and catastrophic shift that will all-out kill the dealerships. And that will be a true emergency.

Or as an alternative, everyone who wants an EV will just move out of Michigan. Most people have already moved out of Detroit so what's a little further move....

 

[cybertruck808]

Tesla loophole for direct sales in Michigan is getting shut with impressive political backstabbing


After years of fighting, Tesla thought it was safe from Michigan’s latest effort to prevent car dealers from having competition from new automakers, but now we learn that the state legislature is trying to shut Tesla’s legal loophole.



Michigan has been a battleground for Tesla when it comes to the right to sell and service its vehicles.

There are several states where Tesla has been banned from selling its vehicles directly to customers due to misused old laws meant to protect car dealers against their own automakers, and Michigan has stood out among them, as it’s the home of the US auto industry.

A change to the law in 2014 prohibited direct sales from automakers that blocked Tesla from obtaining a dealership license and selling cars in the state.

After legislature tried to change things in 2016, Tesla filed a lawsuit against the state, claiming that the ban on direct sales violates commerce laws, and that it was pushed by car dealers and GM in an attempt to block the electric automaker at the last hour.

It has since been a long legal process during which Tesla tried to prove that lawmakers were influenced by car dealers to specifically prevent Tesla to sell vehicles direct to consumers in the state.

Earlier this year, Tesla reached a settlement with the state of Michigan to allow direct sales and service of vehicles. Michigan didn’t officially allow Tesla to get a dealer license, but it is allowing Tesla to sell to and service customers’ cars in Michigan through legal loopholes, like registering cars from another state for deliveries and having a wholly owned subsidiary perform services.

Earlier this year, Electrek reported that the state legislature introduced a new bill that would make sure no other new automaker would get access to that loophole.

The new legislation was introduced after Rivian was looking to set up its own sale and service operations in the state.

At the time, even the Michigan Auto Dealer Association (MADA), who were unsurprisingly backing the bill, said that Tesla wouldn’t be affected by the new legislation.


Terry Burns, executive vice president of MADA, says that the agreement with Tesla didn’t change the law, and the new bill is clarifying that:


However, we now learn that the language of the bill was changed at the last minute before it was approved by Michigan’s house.

Detroit News reports:


The new bill still needs to pass the state senate and be signed by the governor, but if it goes through, it could reverse the loophole put in place as part of Tesla’s settlement with the state.

Tesla opened a service center near Detroit earlier this year following the agreement.

Electrek’s Take
Let me get this straight.

Michigan passed a questionable law preventing Tesla from operating its sale and service centers in the state. Tesla tries to challenge the law at the legislative level, but it gets shut down by politicians who appear to be in the pockets of car dealers.

Then Tesla instead takes Secretary of State and Chief Motor Vehicle Administrator, Ruth Johnson, Michigan’s Attorney General, Bill Schuette, and now former governor Rick Snyder to court over the issue.

These bozos don’t like the heat and decide to settle with an official loophole allowing Tesla to operate.

A few months later, the legislature decides to close the loophole — basically invalidating the result of a three-year-long lawsuit.

This is nonsense, and I can’t imagine that it’s not the result of the US’ massive problem of money in politics.

There’s no other reason to support these kinds of laws other than wanting to play nice with car dealers, who are notoriously big financial supporters in politics at the state level.

Tesla, Rivian, Lucid, and any other automakers who never benefited from third-party franchise dealers investing in building a distribution network for them should of course be allowed to build their own distribution and service network and not be forced to work with third-party car dealers.

There’s no good argument against that.

Michiganders, if I were you, I’d vote out of office all of those politicians who are voting for this new bill — starting with Representative Jason Sheppard, (R-Temperance) who sponsored the bill. I am trying to find a list of the of the 65 house representatives, people who claim to be representing you, who voted for it. I’ll add if/when I find it.

Regarding the bolded portion of Electrek article, Tesla getting the loophole to begin with (via lobbying, lawsuits and threats of lawsuits agaisnt the state) was the result of money in politics. I don't have a problem with money in politics and it is constitutionally protected as an enhancer of speech. Quite frankly, most really don't have a problem with money in politics, only when things don't go their way

That said, I hope that this provision doesn't become law.

 

[Crissa]

I don't like the idea of carve-outs or money being protected speech. Speech is protected - the ability to have a bull-horn is not.

-Crissa

 

[cybertruck808]

I don't like the idea of carve-outs or money being protected speech. Speech is protected - the ability to have a bull-horn is not.

-Crissa

Curious, where would you draw the line? Money has always been an enhancer of speech. If only the mere act of speaking is to be protected, government would be free to shut down a whole lot of mechanisms that we use to get our points across and to petition our government, to include banning political ads on television and online; prohibiting the spending of money on any political campaign; prohibiting media outlets from issuing endorsements or editorials in any meaning way; etc. To me, it doesn't seem practical and efforts to place limits start to get tricky and show one's personal preferences of what should be acceptable to them.

I think the Supreme Court has gotten things right. And, as we've seen, the influence of the dollar only goes but so far often times.

 

[Crissa]

I do not think they have it right. The Supreme Court decided wrongly, in a way that has sent our democracy on a downward spiral.

Ads are not otherwise protected speech. Why should they be when put up by unknown actors with unknown funding?

-Crissa

 

[FutureBoy]

I do not think they have it right. The Supreme Court decided wrongly, in a way that has sent our democracy on a downward spiral.

Ads are not otherwise protected speech. Why should they be when put up by unknown actors with unknown funding?

-Crissa

The anonymousness of the current monied speech is a large part of what I find to be a problem. When a single large donor makes a pack that is named as though it is a grass roots organization that is promoting some issue, I find that to be deceptive and should be stopped.

Here in the Seattle area we have a specific individual (Tim Eyman) who has been funded by some unknown monied backer. He keeps making proposals that often pass but then get struck down in the courts. For the majority of voters though, once they know a proposal was from Tim Eyman, they can be pretty certain how they will vote on the proposal. In the news his name is basically shorthand for how people will see the issue.

For most other issues though the money backing it will tend to be highly anonymous. So people can’t get any context as to why the issue is being debated. That is problematic.

Imagine if all the donations were out in the open. Then we could see which issues were related and get some context as to why they were being proposed. Plus we could see which politicians were being backed by the same monies as certain issues. Additionally it would get real clear real quick who the actual people pulling the strings were. I think for most people that would be very revelatory.

But I didn’t actually come here to discuss politics. So I will be quiet now.