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Tesla Petitions to Sell Cars in Michigan, Delays Launch of Model 3

Published on www.automobilemag.com

February 1, 2016
2015 Tesla Model S 70D Front Grille

Though its Model S has been a global hit, Tesla is still struggling with two key issues: Launching its more affordable Model 3 sedan, and convincing state lawmakers to allow it to sell cars direct to consumers nationwide.
The latter has been a thorn in Tesla’s flank since the automaker launched its direct sales to customers. Instead of a traditional franchised dealership model, Tesla sells its cars directly to consumers, thus eliminating the need for dealerships. However, due to the immensely powerful National Automobile Dealers Association, Tesla is facing an adversary that has more clout and money than the electric-car company.
State legislatures throughout the country have even barred Tesla from selling the company’s automobiles inside state lines or getting a car serviced. Customers are then forced to travel outside state lines to purchase and maintain their cars. One state that has been vehemently against Tesla’s sales method is Michigan, which has gone so far as to have the Governor Rick Snyder sign legislation essentially banning Tesla in the state.
Tesla, however, isn’t giving up, and recently submitted an application for a dealership license within the state so that it can get some clarity on exactly what the law entails — possibly paving the way for a legal battle.
According to a Tesla spokesperson, “As recently amended, current Michigan law prohibits Tesla from being able to license its own sales and service operations in the state. Submission of the application is intended to seek the Secretary of State’s confirmation of this prohibition. Once confirmed, Tesla will review any options available to the Company to overturn this anti-consumer law.”

2015 Tesla Model S 70 D front three quarter

2016 Tesla Model X front three quarter 1.JPG

2016 Tesla Model X official photos falcoln door open side

2016 Tesla Model X official photos front three quarter

While Tesla has engaged in litigation against states that ban direct sales in the past, the company doesn’t seem to be engaging in it as frequently as it once was. However, being able to sell cars in every state is key to the success of the company’s more widely accessible Model 3 sedan.
The Tesla Model S and Model X are relatively expensive, starting at $71,200 and $81,200, respectively. There are only so many households that are able to afford such a luxury vehicle. Tesla’s Model 3 aims to solve that issue with a starting price of just $30,000 after government incentives — matching the Chevrolet Bolt EV.

Model 3 Delayed?

Tesla had slated the first renderings to be made public of the Model 3 this March, but now according to company CEO Elon Musk, the reveal might not be as revealing as the word would imply. At a Tesla event in France, Musk told Auto Express that, “The first pictures of the Model 3 will be end of March. I’m being a little coy here, we are not gonna show everything about the Model 3 until a lot closer to production time.”

Production of the Tesla Model 3 isn’t slated to begin until 2017, which means we might have to wait quite a bit longer until the whole car is revealed.
Tesla’s Nevada-based Gigafactory will allow the company to mass-produce batteries, lowering the cost of the all-important battery packs by 30 percent. For Tesla’s sake, the company needs the Model 3 to be brought to market without issue and without delay, because although Tesla made early strides in the EV marketplace, many other automakers are now catching up with their own products.