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Tesla Fights Car Dealership Monopoly



(p. B4) Tesla Motors Inc. filed an application for a dealership license in Michigan, setting up a potential legal fight over the state's ban on selling cars directly to consumers.


. . .


About a year ago, Michigan passed a law prohibiting car makers from selling directly to customers in the state without an independent dealer as an intermediary. Tesla has opposed such dealer-franchise laws, calling them anticompetitive. Tesla allows customers to order vehicles directly from the company, something that other manufacturers are prohibited from doing.

A formal denial of its application by Michigan could prompt Tesla to pursue additional legal avenues to fight a law it calls "very harmful."

"Tesla is committed to being able to serve its customers in Michigan, and is working with the legislature to accomplish that. The existing law in Michigan is very harmful to consumers," a Tesla spokeswoman said. "Tesla will take all appropriate steps to fix this broken situation."


. . .


Michigan and Texas are among a small group of states that have a flat prohibition on any direct sales. The laws were created to prevent car makers from building their own stores that would ​then ​compete with independent​dealerships. Michigan Automotive Dealers Association couldn't immediately be reached for comment.

Such competition could potentially undercut independent dealerships' prices and undermine investments made in their stores, according to lawyers and economists who have scrutinized dealer-franchise laws.



For the full story, see:

Ramsey, Mike. "Tesla Seeks License to Sell Cars in Michigan." The Wall Street Journal (Tues., Feb. 2, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the article has the date Feb. 1, 2016, and has the title "Tesla Motors Files for a Dealership License in Michigan." The online version is slightly different from the print version. The passage quoted above is from the online version.)






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