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Michigan denies Tesla’s dealer license, automaker says it will keep fighting

Interior of the Cleveland store as line filters in.

Michigan is the most populated state in the US that still doesn’t have a Tesla store or service center. It’s not because Tesla doesn’t want to open one. The company has plans to open a location in Detroit for over 2 years now, but the state direct sales law is banning the automaker from operating a store without going through a third-party dealer.

Again this week, Tesla lost another battle in the state as the Michigan Secretary of State upheld a decision to again deny a dealer license to the automaker for the Detroit store.

Tesla filed the application for this license back in November 2015, but it was at a standstill  the Michigan Secretary of State. The Secretary of State refused to challenge the direct sale law that bans automakers from operating car dealers in Michigan.

A Tesla spokesperson sent us the following statement after the ruling:

“At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state. As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers.”

This latest setback could push the automaker to go to court, like it did in Utah for example. It was something Tesla was considering back in May. Tesla General Counsel Todd Maron said at the time:

“It is a very important state. Whether it’s through the Legislature or the courts, one way or another, we’re determined to do whatever we need to do in order for justice to prevail and serve our customers in Michigan.”

Earlier this year, we reported on a group of Tesla owners that formed an association in Michigan in order to promote new legislation to allow Tesla to sell its vehicles without having to go through the traditional third-party franchise dealership. The group was giving test drives in their own vehicles to circumvent the state law.

Featured Image: Interior of the Tesla Cleveland store as line filters in on March 31, 2016 – the first day of Model 3 reservation – by Jon Jivan.

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