GM backs anti-Tesla Michigan bill

David Shepardson
Detroit News Washington Bureau

Washington — General Motors Co. — the largest U.S. automaker — said Tuesday it supports legislation that would prevent Tesla Motors from selling cars in Michigan.

Gov. Rick Snyder must decide by Tuesday whether to approve legislation that would bar the Palo Alto, Calif., electric vehicle firm from selling cars through its network of company owned showrooms, rather than through independent dealerships.

“We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan; therefore, we encourage Governor Snyder to sign it,” GM said.

Tesla blasted GM for its stance on the measure.

"What's good for GM's customers is not necessarily good for Tesla's customers. What's good for gasoline cars is not necessarily good for electric cars. Tesla is selling a new product with a new technology,” the automaker said in a statement.

“The evidence is overwhelming that a traditional dealer-based approach does not work for electric cars. Moreover, GM distorts the purpose of the franchise laws (including in Michigan), which are in place not to cement a monopoly for franchised dealers but rather to prevent companies with existing franchises from unfairly competing against them. Tesla has never used franchised dealers, so these concerns are simply irrelevant."

Last week, Tesla blasted the bill pushed by the Michigan Automobile Dealers Association as “harmful to consumers.”

“Not content with enshrining their ability to charge consumers dubious fees, on the last day of the legislative session, the dealers managed to make a last-minute change to the bill in an attempt to cement their broader retail monopoly. Using a procedure that prevented legislators and the public at large from knowing what was happening or allowing debate, Senator Joe Hune added new language in an attempt to lock Tesla out of the state,” Tesla said. “The dealers seek to force Tesla, a company that has never had a franchise dealership, into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers. In so doing, they create an effective prohibition against Tesla opening a store in Michigan.”

The bill, Tesla said, “seeks to prevent Tesla from operating a gallery in Michigan that simply provides information without conducting sales. We could even be barred from telling people about our car.”

Tesla noted that it has fought similar efforts in New Jersey, Missouri and elsewhere, while the Federal Trade Commission posted a blog in favor of Tesla.

Tesla urged consumers to call, tweet or write Snyder “and urge him to veto this legislation and return the issue to the legislature for a full and open debate in 2015.”

Tesla’s rapid rise — production of its first cars didn't start until 2008 — has caught the attention of the world's automakers. GM created Team Tesla to study the upstart company.

"Listen. Like it or not, they think big," then GM vice chairman Steve Girsky said admiringly in October 2013. "Big in terms of range, big in terms of speed."

Diarmuid O'Connell, Tesla's vice president for business development, said in a 2013 Detroit News interview that automakers haven't always taken Tesla so seriously. And not all are convinced Tesla will survive for the long haul.

"Detroit has spent most of its time critiquing Tesla, dancing on our apparent gravestone, rather than seeing us for what we actually are, which is opportunity for them to de-risk a promising category of technologies, to create a market that they can take advantage of us," O'Connell said.