Michigan Republican Governor Rick Snyder just signed a bill that would prevent Tesla Motors from selling cars directly to its consumers:
House Bill 5606, sponsored by state Rep. Aric Nesbitt, also prohibits auto manufacturers from dictating fees franchised dealers can charge customers. The legislation allows individual auto dealers to make the business decision whether to charge the transaction fee.
Snyder said direct sales of new vehicles is already banned in the state. This law will explicitly require all automakers to sell through a network of franchised dealers.
Earlier today General Motors urged the governor to sign the bill.
Snyder, who has boasted of making Michigan more hospitable for entrepreneurs, brings Michigan into a growing number of states that have raised obstacles to the California-based electric car company.
The Wall Street Journal reports:
Tesla has fought battles in several states with franchised auto dealers who want to block the electric car company from selling its vehicles directly to consumers. Dealers say they’re concerned that if Tesla is allowed to bypass the dealer-franchise system, other auto makers will seek to do so as well, undermining their investments. Tesla officials counter that since the company has never sold through franchised dealers, laws governing relations between auto makers and retailers shouldn’t apply to its business.
I don’t know about you, but this sounds a bit like…socialism…does it not?
Like many in his party, Governor Snyder has repeated the mantra that government should get out-of-the-way of the free market.
Except when it comes to Tesla, which happens to produce an electric car.
GM strongly supported this bill, of course, since Tesla represents competition. Snyder (and the state legislature before him) did whatever it took to squash competition, no?
“Let Detroit go bankrupt” was the oft-repeated mantra a few years ago after President Obama intervened to save the auto industry in 2009. Yet, these same people who argued against government intervention to stop the industry from crumbling (and thereby destroying the state of Michigan), are now the same ones passing laws that are literally intervening in the free market process!
I get the feeling there won’t be marching in the streets over this latest action.
This anti-Tesla law is just the latest in a long line of episodes featuring how the well-connected dictate public policy–exactly as we’ve witnessed in Washington for many years.