Tesla Sues Michigan Over Factory-Sales Ban

Tesla Motors Inc. has filed a federal lawsuit challenging Michigan statutes that ban carmakers from selling vehicles directly to consumers, electrek.com reports.

Michigan turned down Tesla’s application for a dealership license earlier this month, citing a state franchise law that specifically bans vehicle manufacturers from selling directly to consumers. Michigan has no comparable law that, for example, would prohibit Apple Inc. from selling laptops and cell phones to customers through its own stores.

Tesla previous argued that the Michigan law was intended to prevent carmakers from opening factory-owned stores that would compete with the manufacturers’ own franchised dealers. Tesla contended the law didn’t apply in its case because the electric-car company has no franchised dealers.

Michigan responded in 2014 by rushing through an amendment to close that loophole. Tesla, describing the measure as an “anti-Tesla amendment,” notes that the rule also prohibits the company from servicing Tesla vehicles in Michigan that were purchased in another state.

Tesla, which describes the law as anti-competitive and anti-consumer, claims the statute is unconstitutional. It seeks a permanent court injunction ordering the state to grant the company a vehicle dealer license.