For Tesla Motors [NSDQ:TSLA], selling electric cars has proved more controversial than making them. Tesla's company-owned stores have come under fire in multiple states, where car dealer associations view them as a threat to traditional franchised dealerships. The latest battleground is Michigan, which recently passed a bill banning direct sales in the home state of the Big Three U.S. carmakers. The bill was signed into law by Governor Rick Snyder this week.
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While Tesla and its supporters have actively fought bills in other states, this one slipped under the radar. Language explicitly prohibiting manufacturer-owned dealerships was quietly added to House Bill 5606—a bill intended to offer added protection to franchised dealers and consumers from price gouging by carmakers—without any opportunity for public comment or debate.
The bill was passed unanimously by the Michigan Senate on October 2, then sent back to the House later the same day. It passed there with just one dissenting vote.
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Tesla may have missed this swift move by Michigan legislators, but the carmaker does plan to fight the new law, as it has in other states. Anti-Tesla legislation has already been defeated in Massachusetts, Minnesota, and New York. Nevada legalized Tesla's company-owned stores as part of the incentives package created to land the massive battery "Gigafactory."
Tesla's direct-sales model is currently banned in Arizona, Texas, and Virgina, while the carmaker is limited to one retail location in Colorado. Legislation that would decide the fate of New Jersey's two Tesla stores is still pending.