Michigan Governor signs law banning direct sale of Tesla Motors' cars

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Michigan has become the latest state to ban Tesla from selling its cars straight to consumers, with Governor Rick Snyder signing a law yesterday that prohibits direct sales. Michigan joins a growing number of states that have banned or highly limited Tesla from opening and operating its own stores, generally at the pressure of dealerships that want to maintain their dominant market position and are threatened by manufacturer-owned stores. Dealerships say this protects consumers.

Many states already ban automakers from not using the dealership model, but Tesla's skirting of those rules has prompted new laws that further clamp down on the practice. The ban in Michigan is actually so thorough that Tesla says it is even prohibited from operating galleries within the state, which is what the automaker has done elsewhere so that it can at least present its cars and information on them.

In a blog post after the bill passed, Tesla called the law "anti-competitive" and wrote that "no consumer unaffiliated with dealers would ever want this." Tesla has previously argued that its direct-to-consumers approach is necessary because of the novelty of its product, as consumers generally remain unfamiliar with electric vehicles.

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