Tesla Files Lawsuit Against Michigan’s Top Officials

A photo of a Tesla vehicle parked outside of a showroom.

Photo credit: Hadrian / Shutterstock

Electric car manufacturer Tesla is filing a lawsuit against the state of Michigan for refusing to allow the company to sell directly to consumers. The automotive maker named Michigan Governor Rick Snyder, Michigan Secretary of State Ruth Johnson, and Michigan Attorney General Bill Schuette in its official court proceedings. The lawsuit comes after Secretary of State Ruth Johnson denied Tesla’s application for dealership and service provisions in Grand Rapids.

“Tesla Motors brings this lawsuit to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla owned facilities in the State of Michigan,” the car company stated.

Tesla’s recent litigation comes after years of legal battles between the car manufacturer and the state of Michigan. In 2014, Governor Rick Snyder signed a bill that banned the automotive company from selling without a dealership network.

A spokesperson for Governor Rick Snyder declined to comment on the current charges brought forth. A spokeswoman for Attorney General Bill Schuette said they are currently reviewing the case. Secretary of State Ruth Johnson published a press release, stating that, “The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles.”

For Tesla, the stakes couldn’t be higher, with their much-anticipated Tesla Model 3 scheduled for production late next year. The Model 3 is set to be Tesla’s most affordable vehicle yet, set at $35,000 before tax incentives. The company has already received about 400,000 deposits of $1,000 each from buyers who want to purchase their vehicles in advance.

Tesla currently owns 100 stores in 23 states. For Michigan residents, the closest stores are in Chicago, Cleveland, Columbus, Cincinnati, and Indianapolis. Tesla argues that using a dealership would corrupt their business model. The automotive manufacturer strongly opposes commission-based salaries, and doesn’t want consumers to feel pressured into buying a vehicle.

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About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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