Tesla blasts Michigan bill as 'raw deal'

Tesla says it’s getting a “raw deal” in Michigan.

The electric vehicle manufacturer is speaking out on a bill that would block its direct-sales model in the state and prevent it from operating a gallery. The bill cleared Michigan’s legislative chambers Oct. 2 and is awaiting the signature of Gov. Rick Snyder.

The deadline to sign the bill is Tuesday, Oct. 21.

Dave Murray, Snyder’s deputy press secretary, told Automotive News today that the evaluation process is ongoing.

“When I spoke to the governor about it last night, he said he had some questions about it,” he said. “The staff was researching some more. It’s in the middle of the process.”

Tesla’s fight in Michigan received national publicity this week. The company is followed closely by the national business press amid the meteoric rise of its stock price over the last two years.

The automaker is contesting last-minute tweaks to H.B. 5606 that it says will cement the “broader retail monopoly” of dealerships. In a blog titled, “A Raw Deal in Michigan” posted Thursday, Tesla says Republican state Sen. Joe Hune added new language to the bill using a method that stopped lawmakers and the public from knowing what was going on or allowing debate.

The amended bill passed the Senate 38-0 and was sent back to the House, where it was approved 106-1.

Musk tweet

Tesla CEO Elon Musk tweeted the blog to his 1.1 million Twitter followers early Friday.

“This is a common refrain that we’ve seen from the dealers in a number of states where, rather then openly debate the issue, they sneak in something at the eleventh hour into unrelated legislation and it leads one to wonder what exactly are they hiding? Why are they fearful of having this discussion and debate openly?” asked Todd Maron, Tesla’s general counsel, in a Wednesday interview.

Tesla pointed out in the blog that the Michigan Automobile Dealers Association [MADA] is one of Hune’s top financial contributors. MADA has contributed more than $14,000 to Hune election efforts going back to 2002.

Hune couldn’t be reached for comment today.

The bill, introduced in May, was initially crafted to determine whether automakers could stop affiliated franchised dealers from charging customers certain types of fees, Daniel Crane, a University of Michigan law professor, wrote in an Oct. 15 letter to Snyder.

Then on Oct. 1, the bill was amended to make clear that manufacturers could only sell through “franchised” dealerships. Another piece was added at the end of the document declaring “this section applies to a manufacturer that sells, services, displays, or advertises its new motor vehicles in this state.”

'Process is the process'

Terry Burns, executive vice president of the Michigan Automobile Dealers Association, said Wednesday that Tesla is “more than welcome” to come to Michigan. Burn said he looks forward to Snyder signing the bill and “clarifying the language.”

“It’s the way the system works. I don’t think anything was sneaky,” Burns said. “The process is the process.”