The alteration to the Michigan law prevents what happened in Massachusetts.
Dealers there sued Tesla for operating a store, but the lawsuit was thrown out by the Massachusetts Supreme Judicial Court on Sept. 15 after it was decided that dealers didn’t have the standing to block Tesla’s direct-sales method.
The court denied the appeal by dealers, going along with a December 2012 lower court ruling.
Massachusetts state law only allows dealers to sue a manufacturer they have a franchise relationship with, Crain’s Detroit Business reported.
Tesla continues to operate a store and service center there.
Tesla told Automotive News last month that the Massachusetts decision was the most powerful ruling it had received in its ongoing battle with dealers.
Then on Sept. 18 in Michigan, the state’s House of Representatives passed the bill, which was originally drafted to keep automakers from forcing dealers to charge different documentation fees to different customers.
But on Oct. 1 in the aftermath of the Massachusetts ruling, the word "its" was taken out on the Senate floor from a section declaring that a manufacturer shall not "sell any new motor vehicle directly to a retail customer other than through its franchised dealers."
Another piece was added to 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.”
The amended bill passed the next day in the Senate 38-0 and was sent back to the House, where it was approved 106-1.
The change was crucial because the word "its" in the existing law assumed the manufacturer has dealerships, Crain’s Detroit Business reported.
In Massachusetts, the court ruled that the Massachusetts State Automobile Dealers Association didn’t have the grounds to bring a case against Tesla. Crain’s Detroit Business reported that only a Tesla dealer could sue to stop Tesla, and Tesla does not have any dealerships.
By removing the "its," Crain’s Detroit Business explained that any automobile manufacturer is banned from selling new cars directly to customers, regardless of whether it has dealerships.
Tesla had its eye on the bill for several months, said Diarmuid O’Connell, Tesla’s vice president of business development. O'Connell said in an interview last week that Tesla tracks bills across the country that affects issues between manufacturers and dealers because the automaker is habituated to “sneak attacks.”
"What we have tried to show to the governor and his staff is that the entire purpose of the Michigan statute was to regulate relationships between manufacturers and their franchisees," said Todd Maron, Tesla's general counsel, in an interview Wednesday. "We showed him that in great detail how every provision in the statute does that, and only that. The language that the dealers put in at the last minute was intended to change the statute from that singular purpose to something totally different."
Chris Gautz of Crain's Detroit Business and Amy Wilson of Automotive News contributed to this report.