Michigan Writing New Law Banning EV Sales

Since Michigan is home to the US vehicle manufacturers Fiat Chrysler, Ford, and GM, it appears the state is trying to protect them with a new law banning EV sales. “Those manufacturers already make EVs,” you say. Yes, they do, so the ban would only be on new electric vehicle manufacturers. While it actually does block all EV manufacturers, it was written specifically to block Tesla

All of the US manufacturers hate EV manufacturer Tesla

Tesla store in Los Angeles | Getty

All of the US manufacturers hate Tesla. Partially, it is from decades of vehicle startups failing to give the America Three a certain feeling of omnipotence. It is also because Tesla is valued far higher than any of them. And there is a particular amount of anger from GM as it was from their development and then abandonment of the EV-1 electric car that gave Tesla its foundation. 

But none of those factors into this law which is currently being amended. This is about Tesla’s sales model that sidesteps dealers. Called the “Motor Vehicle Franchise Act” it restricts certain manufacturers from both selling and servicing their vehicles. 

Back in 2016 Tesla won a settlement against the state of Michigan

The new Tesla Motors showroom and service center is almost ready to open in the Red Hook neighborhood of Brooklyn in New York | Getty

Back in 2016 Tesla won a settlement against the state of Michigan allowing sales-type activities at its stores. So Tesla is allowed to give consumer education about EVs, discuss prices, offer test drives, and discuss financing. It can’t actually consummate a sale, but that can be done easily online. And the title transfer had to happen outside of the state.

Now, a new house bill aims to amend certain aspects of the law by not allowing EV manufacturers to support the sales or service of their products according to CleanTechnica. Except for Tesla, that is. This would make Tesla the lone EV manufacturer outside of Michigan to sort of sell its EVs there. But, how can you single out one EV manufacturer over another?

This Michigan law would go against free enterprise

A seller shows the dashboard of the Tesla Model S car at the electric carmaker Tesla showroom of El Corte Ingles store in Lisbon | Getty

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Many are crying foul, saying that it goes against free enterprise. Make a better product and consumers will buy it.  It obviously blocks new EV manufacturers from entering the Michigan market, so it limits consumers’ choices. And Tesla’s mission statement is to see a world-wide transition to sustainable energy. So having a part in blocking EV sales goes against its core mission. 

Some feel it is dealers that want to block even American manufacturers like Rivian from the US free market. Rivian was a Michigan company and its products to this point were developed in Michigan. It has since moved its operations to California. “If the franchise dealer model is so great, why are they afraid of legitimate competition?” asks James Chen, Rivina’s Vice President of Public Policy to Cleantechnica

The Tesla model means dealers are out of the equation

A Tesla employee helps a customer at a Tesla showroom in San Francisco, California | Getty

The easy answer is that the Tesla model means dealers are out of the equation. So this is an end-run to try and eliminate companies like Rivian, Bollinger, and Lucid, step on the dealer franchise model. But these and more are all American companies. How can you block the sale of American products in America? Many fans and owners of Tesla cars are gearing up to fight the Michigan legislature. It will be interesting to see how far this actually can go.