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All EV Makers But Tesla To Be Banned From Making Direct Sales In Michigan Under Proposed Law

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All EV Makers But Tesla To Be Banned From Making Direct Sales In Michigan Under Proposed Law

Any electric vehicle maker that came after Tesla Inc (NASDAQ: TSLA), including Lucid Motors and Amazon.com, Inc (NASDAQ: AMZN)-backed Rivian, won't be able to sell units directly to consumers in Michigan if the state's auto dealers have their way.

What Happened: Last week, a bill was introduced in the state’s legislature that would stop EV makers other than Tesla from selling and servicing vehicles directly without intermediaries, Bloomberg reported Monday.

The legislature is reportedly expected to vote on the bill Tuesday.

Rivian Vice President James Chen accused the state’s auto dealers of “protecting a monopoly through legislation.” 

“This is a bullseye on Rivian and Lucid and any EV manufacturer that would come in after Tesla does,” said Chen.

Why It Matters: In January, the Elon Musk-led company and Michigan arrived at a settlement in a lawsuit dating back to 2016. The agreement allows Tesla to sell vehicles directly to the customers in the state, Bloomberg reported at the time.

The settlement also allows Tesla to operate service centers in Michigan through a subsidiary.

The 2016 lawsuit was filed by Tesla after Michigan-based automakers Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM), and Fiat Chrysler Automobiles NV’s (NYSE: FCAU) domestic unit lobbied for a so-called “anti-Tesla law” to restrict the EV maker’ sales in the state.

Presently, the Michigan Automobile Dealers Association (MADA) claims that Tesla didn't change state law forbidding direct sales and the latest bill is an attempt to clear ambiguity, Bloomberg reported.

“That settlement was based on a clear set of specific facts for a specific time,” said MADA executive vice president Terry Burns.

Price Action: Tesla shares closed 1.64% higher at $449.39 on Monday and fell almost 5.9% in the after-hours session to $423.04.

 

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