Tesla Gives In, Seeks Michigan Dealership Franchise

Tesla Model S (Credit: Car and Driver)

They say you can’t fight city hall, and apparently Tesla Motors is agreeing. In a surprising move, the California automaker submitted an application for a dealership franchise to the Michigan Secretary of State Office. As The Detroit News reports, the paperwork was actually submitted back in November of last year.

It might appear that Tesla is giving up, but instead this might be the company giving in slightly for a long-term win. By jumping through the government hoops, Tesla and its lawyers could possibly solidify that the supposed ban on direct vehicle sales in Michigan is actively being enforced. Then, Elon Musk and company can weigh their legal options before moving forward.

In other words, don’t be looking for any Tesla franchised dealerships to pop up in Michigan anytime soon.

Whatever happens next, the fact is many consumers are growing tired of direct vehicle sales blockades in various states. By taking on Michigan, which is perhaps the biggest foe to any sales models that involve circumventing traditional dealerships, Tesla could get other holdout states to back down.

Just how Tesla is allowed to operate in different states varies quite a bit. After negotiating and even using litigation in places like New Jersey, Pennsylvania and New York, the automaker now can open a limited number of retail locations, or satisfy other requirements, to set up stores. Some states, such as Texas, are still barring Tesla from doing anything that even resembles face-to-face sales. For example, a new retail location in Utah currently only offers 10 Superchargers and vehicle servicing, instead of being able to sell any vehicles.

Some believe that Tesla Motors should simply push forward with face-to-face sales activities in states like Michigan, saying that the U.S. Department of Justice will then have the ability to put the issue to rest through the courts. That still could be what Tesla is up to, but the company will likely see exactly how the Michigan state government responds before making any other moves.