The battle in Michigan with Tesla Motors, an upstart electric vehicle manufacturer based in California, is pressing the issue of free enterprise.
Bloomberg News reports that Michigan lawmakers have passed legislation blocking Tesla Motors Inc. (TSLA) from selling its electric cars in Michigan directly instead of through a franchised car dealership. Snyder has until Tuesday to decide whether to sign the bill into law.
The Snyder administration isn't exactly tipping its hand as to which way it will go, and probably feels even more pressed than usual to try and make the right call considering the election is just around the corner.
“Many bills came over as the legislature finished the session, and the governor is doing due diligence by examining all of them,” said Dave Murray, deputy press secretary for Snyder, Bloomberg reports.
Bloomberg writes:
Elon Musk, Tesla’s co-founder and chief executive officer, has said the unique nature of the company’s cars means that they are best sold directly by the company, rather than through franchised dealers. Tesla operates its own showrooms, or galleries, and takes orders over the Internet. That approach undermines how franchisees have sold vehicles for decades, dealers have said.
The youngest publicly traded U.S. automaker, which is based in Palo Alto, California, was surprised to see the bill pass this year in its current form, said Diarmuid O’Connell, Tesla’s vice president of business development, who encouraged Snyder to veto the bill.
“States are fully within their rights to protect consumers by choosing the way cars are sold and serviced,” Charles Cyrill, a spokesman for the National Automobile Dealers Association, said in an e-mailed statement to Bloomberg. “Fierce competition between local dealers in any given market drives down prices both in and across brands. While if a factory owned all of its stores, it could set prices and buyer would lose virtually all bargaining power.”
