— Tesla's lawsuit against Michigan is over after the state argued the automaker couldn't sell cars to Michigan residents unless sales took place through franchised dealerships.
Tesla filed the lawsuit against Michigan in 2016 after the automaker accused the state of bowing to dealer lobbyists who claim it's illegal for an automaker to sell direct to consumers.
The lawsuit alleges a Michigan legislator said Tesla wasn't welcome in Michigan because dealerships didn't want Tesla doing business in the state. The automaker also alleges the legislator warned that local automakers such as Ford and GM didn't want Tesla to do business in the state.
Tesla doesn't sell through independent dealerships because of a belief a consumer should deal with the automaker, from start to finish. This leaves out the middleman (dealer) when purchasing a vehicle, but state dealer associations aren't fans of Tesla's methods.
The only way a Michigan resident could previously drive a Tesla was to leave the state to purchase the electric car. Michigan customers also had to leave the state to have their vehicles serviced by Tesla's technicians, typically forcing owners to head to Ohio before driving back home to Michigan.
Although the lawsuit is over, the agreement doesn't mean Tesla dealerships will start popping up across the state, but Attorney General Dana Nessel says the settlement does mean any "Michigan resident may lawfully buy a Tesla and have it serviced in Michigan.”
Michigan agreed to “take no enforcement action against Tesla or any Tesla subsidiary” once the lawsuit was settled, but the automaker must follow the rules or face action from the state.
According to the agreement, the automaker may open facilities in the state to educate consumers about the electric vehicles, perform test drives and discuss all aspects of owning a Tesla. Those facilities must also explain how a Michigan customer must order and purchase a "vehicle for which legal title transfers out-of-state.”
In short, the purchase agreement must show the transaction took place outside of Michigan, then the title can be transferred to the Michigan resident and address.
Michigan customers will also be allowed to have their vehicles serviced in the state, but only by a subsidiary called, "Tesla Michigan."
“Today the state of Michigan defendants Secretary of State Jocelyn Benson and Attorney General Dana Nessel filed a stipulation to dismiss with Tesla that recognizes that any Michigan resident may lawfully buy a Tesla and have it serviced in Michigan. The stipulation acknowledges that Tesla may: operate under existing Michigan law; sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan; and, indirectly own service and repair facilities in Michigan through a subsidiary, Tesla Michigan.” - Michigan Attorney General Dana Nessel
The automaker had federal officials on its side in the legal fight as the Federal Trade Commission (FTC) jumped into the fight by recommending Tesla be allowed to sell direct to Michigan consumers.
