Tesla applies for Michigan dealership license in unusual move [UPDATE]

UPDATE:A Tesla spokesperson told AutoblogGreen that, “As recently amended, current Michigan law prohibits Tesla from being able to license its own sales and service operations in the state. Submission of the application is intended to seek the Secretary of State’s confirmation of this prohibition. Once confirmed, Tesla will review any options available to the Company to overturn this anti-consumer law.“

Tesla has made it unmistakably clear over the past few years that it does not believe in the traditional dealership model. Just a few weeks ago in Washington, DC, in fact, Tesla general counsel Todd Maron told the FTC that the company’s overall mission to change all the gas cars to plug-ins can’t work with old-school dealers. So that makes it incredibly interesting that Tesla has now applied for a dealership license in Michigan.

First reported by Michigan Information & Research Service Inc. (sub. req.) and then The Detroit News, Tesla applied for a Class A dealership license in November, 2015. Class A is your standard new and used auto dealer license , and it requires an associated service center. The Michigan Secretary of State asked for more information, to which Tesla responded in the last week, and the SOS will make a decision in the next month or two, the SOS told AutoblogGreen. The Detroit News suggests that a Class A dealership could be run by anyone – a former employee, for example – except Tesla itself.

Normally, manufacturers don’t seek to license. – Fred Woodhams

Fred Woodhams, a spokesperson for the Secretary of State’s office, told AutoblogGreen that this is Tesla’s first application for a license from the state of Michigan. What’s unusual is that we have an automaker itself asking for the license. Usually, a third-party dealer or a dealer network is the one asking for the license. “Manufacturers usually are not directly selling, in the past,” he said. “And that’s what the Department will be reviewing. Normally, manufacturers don’t seek to license.”

As all of this is unfolding, a 22-year-old University of Michigan grad is starting up a petition to get either the Michigan legislature to act on the question of whether Tesla should be able to sell directly to customers or to put the questions on a ballot for the people to decide. Organizer Mick Yuille needs 252,000 signatures by June 1 to force the legislature to react. This petition is a reaction to a law that Governor Rick Snyder signed in 2014 that officially banned Tesla (and other similar automakers) from offering direct sales. This means that Michigan residents who want a Tesla have had to get creative.

The FTC, which is currently listening to a number of industry players on the value and challenges of changing dealership laws, told the Michigan Legislature last year that the direct sales ban was protectionist and that, “blanket prohibitions on direct manufacturer sales to consumers are an anomaly within the larger economy.”

While Tesla doesn’t have any stores or service centers in Michigan at the moment (its website says that it will have a service center in Detroit “soon”), it did buy Riviera Tool LLC last May. That company is now called Tesla Tool and Die Factory.

We have asked Tesla more information on this application and will update this post if we get more details.

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