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Tesla's Settlement With Michigan Could Be Undone By Auto Dealer-Backed Bill Passed In State House

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Tesla's Settlement With Michigan Could Be Undone By Auto Dealer-Backed Bill Passed In State House

In January, Tesla Inc (NASDAQ: TSLA) reached a settlement with the state of Michigan that would allow the company to sell cars in the state and open service centers. Before this, people would have to travel out of state to purchase a Tesla or take it into a service center.

The Michigan House of Representatives has passed a bill that removed language that allowed Tesla to operate in Michigan, according to The Detroit News.

This new bill passed by a 65-39 vote counteracts Tesla's January settlement by banning vehicle manufacturers from directly or indirectly owning a repair or service center.

The settlement in January was key to allow Tesla to operate in the state.

The legislation still needs Senate approval and the governor's signature before becoming law. House bill 6233 initially included language that allowed an agreement between the state and Tesla, but that language was removed in an amendment approved by the state House on Dec. 2 shortly before the chamber voted.

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Benzinga's Take: This could be bad news for Tesla and its customers. If this becomes law, Tesla would likely need to close the company's existing service center, lay off employees and reduce Michigan investments. 

Customers would need to travel out of state for any services, and new customers would also be forced to travel to neighboring states to purchase one of the company's electric vehicles.

Photo courtesy of Tesla.

 

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