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State Rep Aaron Miller Introduces Bill to Allow Tesla to Operate in Michigan

Discussion in 'Midwest/Great Lakes' started by Joel, Feb 3, 2016.

  1. Joel

    Joel Active Member

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    https://www.legislature.mi.gov/documents/2015-2016/billintroduced/House/pdf/2016-HIB-5312.pdf

    Michigan Legislature - House Bill 5312 (2016)


    Miller Bill Would Allow Tesla To Operate In The State

    A bill introduced Wednesday by Rep. Aaron Miller would allow Tesla Motors to sell its electric vehicles in the state, although the car company doesn't use the standard dealership model.
    HB 5312 would strike the state's prohibition on direct sales from a manufacturer. The bill also provides a geographical protection so a Tesla manufacturer would not be able to sell within 10 miles from a traditional dealership.
    Mr. Miller (R-Sturgis) said it is a tough issue for constituents and lawmakers. And he said he is not looking to go after dealerships in his bill, which he said shows with the geographical protection.
    "It's a sensitive issue because dealers are wonderful business people back home. They are in almost every district in Michigan," he said. "And yes they are wonderful players in the community. They donate to charitable causes, they participate in local activities, they are involved in their communities. And I think it's fair to say that's why it's going to be a tough issue."
    The Auto Dealers of Michigan has fiercely resisted Tesla's efforts to sell directly, saying it should abide by Michigan law requiring it to sell through a franchised dealership.
    Tesla has mounted a major public relations offensive in the past several months, offering test drives of one of its vehicles to legislators and reporters. And it recently filed a request with the Department of State for a new and used auto dealer license as well as a repair facility license.
    Mr. Miller said although the bill will be "inevitably called the Tesla bill" it is about a change in philosophy as well.
    "Yes, Tesla is pushing this, everyone knows that. But to me it is about allowing a business model to operate in Michigan that currently is banned. It is that simple," he said. "What I would like to do is start a discussion. "
    The bill was sent to the House Commerce and Trade Committee, where Chair Rep. Joe Graves (R-Linden) said he is open to having a committee hearing on the legislation. He said he has met with representatives from Tesla previously, but has not yet seen Mr. Miller's bill.
    The Michigan Freedom to Buy coalition praised the introduction of the bill.
    "Technological innovation and evolving market forces are rapidly impacting the new car industry. Consumers want more choices and more convenience," Keith den Hollander, chair of the Michigan Christian Coalition, said in a statement. "They don't want to be forced by the government to buy their cars from a certain type of monopoly retailer. They want the freedom to buy the cars they want in the manner they choose."
    Terry Burns, executive director of the Auto Dealers Association of Michigan, said his organization would have to review the bill with its members first. He did not disagree that it is at odds where his group has historically come down on such issues.
    "It sure does go directly at the root of the franchise act," he said. "Of course those will be factors we will take into consideration as we review it."

    - See more at: Gongwer News Service - Michigan
     
  2. tomsModelS

    tomsModelS Member

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    Thanks for posting, Joel. Ten mile restriction is huge, but it's a start.
     
  3. Paulharmo

    Paulharmo Member

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    Interesting way to try to solve the problem.

    I don't think geographical limitations are the answer. The first problem being that in areas like Greater Detroit, dealerships are everywhere. To find a location at least 10 miles from every dealer, you'd end up in the middle of nowhere, not in a town, etc. It would be anti-competitive to make Tesla stay that far away from a dealership network that has had many decades to saturate the market state- (and nation-) wide.

    OK, so Tesla does manage to find a spot in the boonies, and opens a Showroom/SC 10.1 miles from the nearest dealership. Now is that 10 mile radius completely off-limits to any dealerships that may wish to open in the future? Surely, if a dealer opened in that area, Tesla would not be asked to relocate in accordance with the bill.

    I understand the reason for picking a geographic limitation, but I can't see it working.
     
  4. timf

    timf Member

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    I think people are misinterpreting the 10 mile restriction. Reading the law, it's clear that the restriction is only on manufacturer-owned dealerships located within 10 miles of THAT BRAND'S franchised dealerships. For example, if Ford wanted to open up a company-owned dealership, they could not do so within 10 miles of any existing franchised Ford dealership. Since Tesla does not have any existing franchised dealerships, this provision would not impact them. It's only there to provide protection for existing dealerships from their manufacturer invading their home turf.
     
  5. MsElectric

    MsElectric Active Member

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    Would it be fair to ban apple from having a store within 10 miles of a Best Buy?
     
  6. timf

    timf Member

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    No, but the volume of sales in small electronics is high enough that both will still be able to generate enough business, not to mention prices are often lower for the same items at Best Buy versus directly from Apple.

    The 10 mile radius in the automotive industry has some precedence, including in Tesla's home state of California. California provides protection from manufacturers locating new dealerships (whether franchised or company-owned) within 10 miles of existing dealerships. This seems like a perfectly fair provision given the costs of maintaining and operating a dealership, and is better than the alternatives in other states whereby Tesla is limited in the number of locations or volume of sales before they must start using franchises. It also avoids carving out a niche exception for alternative fuel vehicles, as even ICE manufacturers could choose to operate company-owned dealerships that do not overlap with existing franchises.
     
  7. John Stuckey

    John Stuckey Member

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    I like the idea of opening showrooms, repair facilities, etc on Indian Reservations - no need to go begging to politicos that have already been purchased by big ICE and OIL. Co-locate with casinos and help provide jobs for native populations. Seems like a win-win-win-win for Indians, Tesla, Tesla owners and the world in general.
     

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