TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Michigan Tesla Stores and Service Centers

Discussion in 'Midwest/Great Lakes' started by physicsfita, Sep 1, 2014.

  1. physicsfita

    physicsfita Member

    Joined:
    Jan 20, 2014
    Messages:
    424
    Location:
    Ann Arbor, MI
    I took a trip to Columbus a couple of days ago, and decided to stop by the store there. I asked the Tesla salesman when there would be a store in Michigan. He said that they were trying to put a service center in Detroit, but it was "in litigation". That was the first I heard of anything like that, so I asked him if Tesla was in court over this. He said no, but then reiterated that it was "in litigation", so I'm not sure what that's supposed to mean, and he refused to elaborate.

    I also got the impression from him that putting in a store in Michigan seemed like a low priority to Tesla, and he wouldn't indicate what sort of timeline they may have for it. I got the feeling that the timeframe was on the order of years.

    I asked him if they would put store in Toledo or some place like that if they couldn't get anything going in Michigan -- he said no, they already had all the stores that Ohio law permits. This is a bummer, since that would mean a half-day drive (or, God forbid, tow) to get service on the car -- I'm worried that might be a deal-breaker for getting a Model 3 when it comes out (which he said would be sometime in 2017, by the way). At least it sounded like taking delivery in Ohio would be easy, with Tesla taking care of all the Michigan paperwork.

    Does anyone have any insight as to the nature of this "litigation" that apparently doesn't involve the courts? Does anyone have any clue when Tesla might get around to putting a store in Michigan?
     
  2. timf

    timf Member

    Joined:
    Apr 14, 2013
    Messages:
    896
    Location:
    Michigan
    I know there are other forum members with more knowledge on the situation, but my understanding is it has to do with the same type of dealership laws Tesla has been fighting in other states. Michigan has the most restrictive laws protecting franchised dealerships in the nation, which is understandable considering the presence of automobile manufacturers and their potential to circumvent dealerships to sell and service their employees' cars. Not only are manufacturers not able to sell directly to consumers, but they cannot directly perform any service work either. They managed to get around similar restrictions on service centers in Texas via a convoluted process, and I suspect they are working on something similar with the state of Michigan but the loopholes are likely different.

    Michigan is at a bit of a disadvantage since it's a smaller market for Tesla. There shouldn't be anything that prevents them from opening a gallery-type store here, but they must feel current market conditions do not warrant it. I agree that something will need to change before the Model 3 is released. I was discussing the service center situation with some coworkers last week and it sounded like it would be a major negative for them. I've convinced myself that it's not a big deal and am even anticipating driving to Columbus to have the full delivery experience (rather than having a truck drop it off) when the time comes for my Model X. That's still quite some ways off though, so hopefully the issue gets resolved by then.
     
  3. megawhizz

    megawhizz Member

    Joined:
    Apr 26, 2014
    Messages:
    31
    Location:
    Detroit, MI
    I would definitely like to see a Michigan Service Center (secondarily, a store).

    I recently called Tesla Assistance for service on my vehicle, and they said they would "route my call to the Michigan Service Center." I was quite surprised on hearing this and asked the rep to confirm that indeed there was a MI service center, and he said "it must have opened recently." BUT... he called back about 15 minutes later saying he was misinformed, there was no MI service center, but there was a Guy in the area who did Ranger visits.

    My call was routed to the Columbus Service Center, and I am waiting for resolution (side note - taking way longer than expected). Once the Cleveland SC is open, that will likely be the closest to us.
     
  4. Pilot_51

    Pilot_51 Member

    Joined:
    Jan 18, 2014
    Messages:
    529
    Location:
    Metro Detroit, MI
    When I asked my DS a couple days before my delivery, she said "Detroit Service Center is a surprise. Or at least that’s what I am telling people because we don’t have any definite plans."

    I remember someone in another thread mentioned that it's because Michigan law doesn't allow a manufacturer to open a service center in the state if they sell directly. So, pretty much what timf said.
     
  5. Joel

    Joel Active Member

    Joined:
    Mar 24, 2011
    Messages:
    1,164
    Location:
    Michigan
    #5 Joel, Sep 3, 2014
    Last edited: Sep 3, 2014
    Michigan's statute is the most restrictive of any state. More restrictive than Texas, Arizona, New Jersey, etc.

    Michigan's law restricts interstate commerce for both sales and service. You read that correctly: Michigan's law prohibits a manufacturer from owning a service center. There are service centers in Texas, Arizona, and New Jersey, but Michigan law prohibits a manufacturer from owning a service center.

    Michigan Legislature - Section 445.1574


    The statute goes so far to prohibit manufacturers from owning service centers to address recalled items. Theoretically, if GM wanted to build service centers in Michigan to fix all their recalled cars, Michigan law prohibits GM from doing so.
     
  6. GSP

    GSP Member

    Joined:
    Dec 28, 2007
    Messages:
    1,996
    This in "the land of the free." Maybe 200 years ago, but not so free anymore.

    I think that citizens of communist China are now more free to do business with each other than US citizens are.

    It is time to get our lawmakers to allow free trade and interstate commerce in this country!

    GSP
     
  7. timf

    timf Member

    Joined:
    Apr 14, 2013
    Messages:
    896
    Location:
    Michigan
    That law is even more restrictive than I previously thought. If I'm reading it correctly, they can't even use a third party repair shop to perform warranty or recall repairs, which would be the approach taken in Texas. Those could only be done by a franchisee which doesn't exist. So, the options available for Tesla are limited to the following, from least likely to most likely:

    1. Get the legislature to pass an exception to the law. This would face opposition not only by dealers but also the competing automakers which are the foundation of the state's economy.
    2. Go against their business model and establish a franchise in Michigan, leading other states to question the exemptions they've received there and totally destroying Tesla's business model.
    3. Continue to use out-of-state service centers, rangers, and third party trucking companies to support Michigan Tesla owners.

    The good news is Teslas don't require much maintenance, and there's nothing preventing an out-of-state purchase. So, it looks like status quo it is for the foreseeable future.
     
  8. physicsfita

    physicsfita Member

    Joined:
    Jan 20, 2014
    Messages:
    424
    Location:
    Ann Arbor, MI
    Curious that section (i) permits direct sales to nonprofits and government buyers -- is it possible that some sort of equal-protection claim could be made against that? (I'm not a lawyer, so I have no clue about that -- maybe someone else does?) I'm also curious if section (i) would permit the creation of a gallery -- the language isn't obvious to me.

    It appears that section (p) permits the manufacturer to do warranty and recall work if it's for "emergency service" -- would a safety recall fall under that umbrella?

    Also, does anyone know if Tesla is doing any sort of lobbying to get an exemption like they have in other states (or pursuing some other remedy)? It seems like they would have to start such an effort now if they hope to have a store or service center in Michigan before the Model 3 comes out...
     
  9. Pilot_51

    Pilot_51 Member

    Joined:
    Jan 18, 2014
    Messages:
    529
    Location:
    Metro Detroit, MI
    With all those restrictions, I'm wondering why Tesla added Detroit as "coming soon" when they have no clear path to do it legally. I can only hope that they have something up their sleeve, like a legislative push of epic proportions or perhaps some kind of pseudo-franchise that works around the law without breaking their business model. They can continue with out-of-state and ranger service for a while longer, but I doubt it would be sustainable with Model 3.
     
  10. Joel

    Joel Active Member

    Joined:
    Mar 24, 2011
    Messages:
    1,164
    Location:
    Michigan
    An example of Direct Sales to nonprofits and government buyers would be Ford selling directly to municipalities for law enforcement vehicles (i.e., police cars).

    There is a lot of vague language in that statute ("reasonable," "arbitrary," "capricious," etc). Unless you are an attorney billing an hourly rate to "interpret the statute" don't waste your time. The language is intentionally vague to protect certain interested parties. It won't be productive to define "emergency service" because an auto dealer's definition may differ from our definition.

    I would imagine Tesla will lobby for an exemption or carve out like the other states.

    I would imagine Tesla did not realize how restrictive Michigan's statute is before they planned on a Detroit service center. Just a guess.
     
  11. timf

    timf Member

    Joined:
    Apr 14, 2013
    Messages:
    896
    Location:
    Michigan
    A news story popped up today in the Wall Street Journal. This is the first I've heard of Tesla actively fighting legislation in Michigan. It sounds like in recent days new legislation has been introduced that would go as far as to prohibit gallery-type stores, effectively shutting down any means of Tesla to market their products through company owned resources in the state. I hope things don't get worse before they get better, and Tesla can reach some sort of compromise.

    Tesla Fights Michigan Legislation on Direct-Selling, Servicing - WSJ
     
  12. physicsfita

    physicsfita Member

    Joined:
    Jan 20, 2014
    Messages:
    424
    Location:
    Ann Arbor, MI
    #12 physicsfita, Oct 9, 2014
    Last edited: Oct 9, 2014
    Glad to hear that Tesla is on the ball in Lansing. I hope they're pitching the networks and the local TV stations to do some more "What is the NADA Afraid Of?"-type stories along the lines of the one Al-Jazeera America did with respect to Georgia. I have to say, banning galleries seems more than a little over-the-top to me.

    Unfortunately, I get the bad feeling that Musk may need to start making campaign contributions of his own if he wants these shenanigans to come to an end... :crying:
     
  13. TexasEV

    TexasEV Active Member

    Joined:
    Jun 5, 2013
    Messages:
    3,772
    Location:
    Austin, TX
    The banning galleries language is probably just starting off with an extreme position so the auto dealer cartel can claim they "compromised" when galleries are allowed but stores are banned or limited. Don't the dealers realize how they're making themselves even more hated than they already are?
     
  14. JohnQ

    JohnQ Active Member

    Joined:
    Jan 1, 2012
    Messages:
    1,585
    Location:
    Redding, CT
    Sales from stores owned by manufacturers are already banned in Michigan, along with service centers. They're just trying to close the "loophole."
     
  15. Joel

    Joel Active Member

    Joined:
    Mar 24, 2011
    Messages:
    1,164
    Location:
    Michigan
    I was just typing that. Great minds think alike...

    It will be interesting to see if the dealers take a stand in Michigan. Michigan's Eastern District is the last place the dealers want this law to be challenged in Federal Court.
     
  16. TexasEV

    TexasEV Active Member

    Joined:
    Jun 5, 2013
    Messages:
    3,772
    Location:
    Austin, TX
    So if this law is passed it would currently affect one auto manufacturer, which is based outside the state, and make it more difficult to show its cars in Michigan to get people interested in them. In a state with a large presence of the big three automakers. That's what could make this fight different from the typical dealer protection laws-- it could also be seen as favoring the local manufacturers over the out-of-state one. Interstate commerce clause, here we come!
     
  17. CliffG

    CliffG Member

    Joined:
    Feb 10, 2014
    Messages:
    245
    Location:
    New Jersey
    If they were worried about whether anyone hates them, they wouldn't be such vermin in the first place. That won't stop them. Maybe they'll stop if it's ever clear to them that they'll make more money if they stop.
     
  18. Aphysician

    Aphysician Member, Michigan Chapter

    Joined:
    May 3, 2013
    Messages:
    298
    Location:
    Metro Detroit, MI
    Cleveland Service Station

    Made the call today for regular annual service. Detroit will be served by Cleveland store now.
     
  19. xy46

    xy46 Member

    Joined:
    Nov 9, 2014
    Messages:
    190
    Location:
    Grand Rapids, MI
  20. Jim MacInnes

    Jim MacInnes Member

    Joined:
    Nov 1, 2014
    Messages:
    192
    Location:
    Michigan
    I also called today to ask about service options. The Cleveland service center told me they can do the annual service in Michigan using a ranger and that the ranger vehicles are now being equipped to handle this. Prior to this change they said you needed to bring your vehicle to Cleveland which is a 6.5 hour drive for NW Lower Michigan owners. Glad they are putting this new program in place.
     

Share This Page