Tesla Motors Inc (TSLA) to Find another Way to Reach People of Michigan

Following the cue provided by the states of Arizona, Maryland, New Jersey and Texas, Michigan also ruled out direct selling of Model S by Tesla Motors Inc (NASDAQ:TSLA) in the state. In fact, in Michigan things have been taken a step further wherein the car manufacturer is not even permitted to set up information galleries pertaining to its new product. Considering that it enjoys this privilege in the other four states, the situation is no-win for Tesla since Michigan is one state where it does not have even a single outlet.

The legislation signed by Republican Governor of the State of Michigan, Rick Snyder, on Tuesday, 21st October, 2014, is an official stance that prohibits Tesla Motors Inc (NASDAQ:TSLA) as also other car manufacturers from selling their wares directly to users within the state. As justification for his action, Governor Snyder provided the following explanation to law-makers –

“This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan – because this is already prohibited under Michigan law.”

Tesla Motor (TSLA)

Diarmuid O’Connell, Vice-President of Tesla Motors Inc (NASDAQ:TSLA) confirmed that while the legislation had been passed by a vote of 38 to 0 in the Senate and 106 to 1 in the House without naming any entity in particular, the fact that it was indicated at Tesla was crystal clear. He also went on to point out that lack of public debate on the issue was reflective of the fact that the dealer network in the state did not favor it.

Therefore, when Governor Snyder submitted a letter to the legislators stating that –

“A healthy, open discussion can and should be had over whether the current business model in Michigan should be changed.”

Both O’Connell and Todd Maron, General-Counsel for Tesla regarded this statement as a positive development for the company. This is owing to Tesla’s winning streak with open debates and this also explains the note of confidence in Maron’s voice when he said –

“We expect to be back in Michigan very, very soon to have an open debate. Usually when this debate takes place in public, the right outcome happens.”

Till then, eco-friendly customers in Michigan who wish to use Tesla Motors Inc (NASDAQ:TSLA)’s Model S to make a difference to the planet need to think of an alternative solution to acquire it.

This article has been written by Vinita Basu.

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