Tesla Is Taking Michigan To Court Over The State's Anti-Direct Sales Law

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In 2014, Michigan Gov. Rick Snyder signed a law that blocks the direct sales model that Tesla uses, which stopped the carmaker from selling its cars in the state. General Motors was in support of it. And now Tesla is suing the state in federal court because of it.

Tesla said that its purpose was to “vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles” in the filing, reports Electrek. The Anti-Tesla law prevents it from doing so, it feels. Tesla demands a trial by jury and has named Snyder, state Attorney General Bill Schuette and Michigan Secretary of State Ruth Johnson in the suit.

Tesla argues that the law “violates the Due Process, Equal Protection, and Commerce Clauses of the Constitution.”


“The automaker seeks a permanent injunction preventing State officials from enforcing the relevant section of the law, which would force the state to issue Tesla a dealership license,” writes Electrek.

In a statement, Tesla said, “For the last two years, Tesla has pursued legislation in Michigan that is fair to everyone and that would benefit Michigan consumers. Giving auto dealers a monopoly on car sales benefits them, but harms consumers,” reported Automotive News.


In addition to Michigan, Tesla also hasn’t been able to get a dealership license from Texas, Connecticut or Utah. Tesla’s unique direct sales model has been praised for its transparency and ease of experience. It also removes dealer fees, which prevents price inflation for its customers.

You can see the whole suit here.

Tesla suing Michigan over direct sales by Fred Lambert on Scribd