The case over Michigan’s ‘Anti-Tesla law’ will be dragged out well into 2018 as both sides are expected to provide a list of expert witnesses next month, and the pre-trial “discovery” phase is predicted to take months.
A lawsuit of this magnitude has the potential to set national precedent in commerce and trade regulations as Tesla continues to defend its business model relying strictly on hype and word-of-mouth.
“Any type of lawsuit like this — whether you win or lose — establishes a precedent,” said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor in an article published in The Detroit News. “It’s hard to change the direction of that. It’s a big deal.”
As Model 3 sales begin to roll out, the law is stifling business in a state where car manufacturing is the largest industry.
The law bars Tesla from practicing its direct-to-consumer distribution model. New auto sales can only be conducted by franchised auto dealerships, which Tesla claims discriminates against out-of-state interests and is an unconstitutional infringement on their preferred business model.
Tesla is currently finding ways around the law — consumers can order their Teslas online but they have to pick them up in neighboring states like Ohio or Illinois.
In Detroit, affectionately referred to as “Motor City,” the automotive industry is the largest industry and largest employer in the entire state of Michigan. Nearly 5 percent of Michigan’s workforce is employed by the auto industry and the industry accounts for $42.4 billion, or nearly 11 percent of the state’s total Gross Domestic Product.
It comes as no surprise that industry giants have powerful lobbyists working to further their agenda. Related political action committees have donated more than $1 million to state office holders since 2011, including all but two active legislators, according to the Michigan Campaign Finance Network as cited in the article.
Revisions were made to the legislation in 2014, but Musk and company are claiming that these revisions are “protectionist” and are aimed at maintaining the status quo of sales regulations.
Representative Aaron Miller (R-Sturgis), introduced legislation that would allow Tesla and other automakers to distribute directly to retailers rather than franchised dealerships, but the bill went nowhere. Miller is a fervent advocate for free-enterprise and is baffled by the states unwillingness to budge on the matter.
“For me it’s simply common sense,” said Miller. “Refusing any company’s style with protectionist laws is just not the right thing to do. I don’t care if it’s Tesla, a small startup…someone who wants to sell jeans or baseballs directly should not have this sort of barrier to be in the marketplace.”
In addition to the lawsuit, Tesla has also tried to subpoena any correspondence between lobbyists and state legislators containing communications regarding the 2014 amended law.
Tesla claims it subpoenaed the legislators because of a June 2016 statements to the company that it will “not be allowed to operate in Michigan because Michigan dealers and manufacturers do not want Tesla in the state.”
Legislators fought back with their claim that this subpoena is an attempt by Tesla to harass them for not submitted to Tesla’s demands.
A trial date has not yet been set.
Top Rated Comments (view all)
Discuss: News
Log in with:
Or sign up with TESLARATI:
What makes you say the oil industry is behind articles like this rather than merely traditional Motown folks more directly?
Not defending the oil industry; just asking 'cause I may have missed the linkage here.
Forbes has been "pro-big-oil" for years. Just read their articles. As this connection is well enough established I consider them to be part of the group profiting from the success of the oil industry.
The longer this drags out, the better for Tesla. Next year it has twice the number of drivers and many more in the state wants to buy it. People are going to be pissed when they learn they can't get full support for their cars because the state prevents it.
Having twice the pent-up demand as otherwise is, at best, a wash, but I doubt that'll even be true. Tesla relies on grassroots for marketing. Having fewer cars in the state now means fewer people know about the company next year.
Having pissed off customers is a definite negative. Whether it's the fault of lawmakers or Tesla, some people are going to avoid Tesla at the risk of it being difficult to have their cars services.
If the court rules against the company, Tesla will wage an all out war against the decision. Expect a massive increase of Tesla Ranger vans, and deployment of mobile car lifts for the 20% of mechanical problems that require it.
Even if the ramp up in service is not financially viable, the company will prefer sustaining the monetary loss while it concentrates on other fronts such as disputing the decision all the way to the supreme court.
I keep on expecting better from Forbes... maybe I shouldn't any longer... :rolleyes:
https://www.forbes.com/sites/realspin/2017/08/11/subsidy-king-tesla-fights-protectionist-laws-in-michigan/amp/[/COLOR]
On this topic... [COLOR=rgb(39, 38, 36)]What a stupid article... :mad:
I keep on expecting better from Forbes... maybe I shouldn't any longer... :rolleyes:[/COLOR]
The oil industry is not fair minded when reporting on it's electric car competition. :eek:
The oil industry is not fair minded when reporting on it's electric car competition. :eek:
What makes you say the oil industry is behind articles like this rather than merely traditional Motown folks more directly?
Not defending the oil industry; just asking 'cause I may have missed the linkage here.
