Tesla must make viable case to sell directly in Michigan, governor says

DETROIT -- Tesla Motors Inc. has yet to make a case for selling cars directly to Michigan consumers, according to Michigan Gov. Rick Snyder.

Snyder, who formerly served as an executive at Gateway, a personal computer company that relied on a direct-to-consumer sales model until 2008, said in an interview with Automotive News on Wednesday that the electric automaker hasn’t presented a viable argument to state government officials and lawmakers for selling its vehicles directly to consumers.

“I’m always open to having that discussion, it’s just that Tesla and the other people who want to do that need to present their case to the Legislature and see if they get people interested in moving on something like that,” Snyder said.

“I’ve sold a lot of computers, I know that model pretty well."

Tesla responds

At a conference in metro Detroit today, Diarmuid O’Connell, Tesla’s vice president of business development, responded to Snyder’s comments, saying the offer to help the automaker was an “empty gesture,” and that Snyder’s attitude toward Tesla given his history with Gateway was a “personal irony.”

“This is a model that’s non-controversial in communist China and socialist France,” O’Connell said. “Why should governments be dictating the models by which a manufacturer has access to the market.”

The automaker sells cars via Tesla-owned stores and online. In 2014, Snyder signed a bill explicitly banning the direct sale of vehicles to consumers. Despite the law, Tesla applied for a dealership license in Michigan but was denied on Sept. 15. In response, Tesla filed a federal lawsuit -- which named Snyder, along with Mich. Secretary of State Ruth Johnson and state Attorney General Bill Schuette -- against Michigan claiming its constitutional right to sell vehicles had been violated.

“I wasn’t quite sure why I ended up being named in the suit,” Snyder said. “I thought it was more of a Secretary of State issue.”

O’Connell said the suit against Michigan was the “next logical legal step” in getting Tesla storefronts in the state.

Michigan is the most populous state to ban Tesla storefronts, galleries and service stations. The automaker has also been unable to obtain dealership licenses from Texas, Connecticut and Utah, though it operates galleries and service stations in those states.

Tesla expansion

As Tesla expands production, it’s looking for new locations for manufacturing facilities, O’Connell said. However, states that have made it difficult to sell Tesla vehicles, “[are] very poor candidate[s],” he said.

Despite its legal battle with Tesla, Michigan has been working to attract other automotive technology companies.

On Sept. 7, the state senate passed a package of bills to ease restrictions on autonomous vehicle testing in Michigan. Though John Krafcik, who leads Google’s car project, said the bills were restrictive, legislators have said they will work with Google and other companies to address his concerns.

After launching an automated ride-hailing network pilot in Pittsburgh, Uber said that it is planning to open a facility in Detroit to work with automakers to develop and test  autonomous technology.

Snyder said the state is looking to continue its collaborative efforts with mobility technology companies, and develop research environments for both simulated and real-life testing.

“It’s not just about one company,” Snyder said. “It’s how well do they play in the sandbox with everybody else.”