Tesla to open larger Gallery store at Somerset in Troy
Tesla Inc. plans to open a larger, free-standing Tesla Gallery this fall at the luxury Somerset Collection mall in Troy after having a small showroom in the Nordstrom store there since late last year.
A storefront build-out on the the first floor of the mall next to the Apple store shows a large Tesla wheel and says “Tesla Gallery Opening Soon Fall 2017.” It’s unclear exactly when the new gallery will open or what vehicles will be displayed.
The Palo Alto, California-based electric automaker can’t legally sell a car in Michigan. It opened a 700-square-foot Tesla Gallery on the first floor of the Nordstrom store in December last year, its first location in the state. It is staffed with Michigan Tesla employees and showcases a white Model X SUV.
Prospective customers at the Tesla Gallery will be able to browse the vehicles. Staff can answer some questions but can’t discuss pricing or offer test drives. A sign in the gallery in the Nordstrom store has referred people online for product details and ordering information.
People who want to buy a Tesla will have to order it online and have it delivered or pick the car up at a retail store near Cleveland, in Columbus, Chicago or other city. Tesla has said it has at least 400 Teslas registered in Michigan.
Tesla has been fighting with the state of Michigan to win the right to sell and service vehicles in Michigan for years. In September 2016, it filed a federal lawsuit against Michigan Gov. Rick Snyder, Secretary of State Ruth Johnson and Attorney General Bill Schuette in September 2016, arguing Michigan’s law requiring new cars be sold through franchised dealers is unconstitutional. Tesla wants the right to sell vehicles directly to consumers.
“It’s unfortunate that Michigan law takes away rights from consumers in order to protect local car dealers. Tesla continues to fight against that law so that Michigan consumers can enjoy the freedom to buy cars as they wish,” a Tesla spokesperson said in an email.
“In the meantime, as Tesla’s legal challenge proceeds, we are expanding our presence in Michigan in order to educate consumers about the benefits of Tesla’s vehicles and sustainable energy products in a fun and engaging environment. Tesla’s new gallery at the Somerset Mall allows anyone interested in Tesla, including the thousands of Model 3 reservation holders in Michigan, to learn about our technology, energy products and cars, including the fastest accelerating and safest production sedan and SUV that have ever been built.”
The carmaker’s sales approach differs from the rest of the auto industry in which manufacturers partner with dealers to sell vehicles. Tesla prefers to sell direct from small showrooms or galleries in high-traffic locations and with a no-pressure environment.
In October 2014, Snyder signed a law banning automakers from selling vehicles directly to consumers. The legislation, passed overwhelmingly by the Michigan Legislature, was backed by the new-car dealership lobby. The law closed a loophole that Tesla has used in other states to maintain company-owned retail stores, bypassing the dealership route.
The governor said then that the law “clarifies and strengthens” a long-standing law that prohibited direct sales of new cars in Michigan. Previously automakers were prohibited from selling new vehicles directly to retail customers except through its franchised dealers; the revised law removed the word “its,” which Tesla viewed as a strike against the company.
Tesla owns and operates a tool-and -ie shop in western Michigan and does business with dozens of suppliers in the state. Tesla operates galleries in other states where it has been banned from direct sales. In Texas, for example, it operates galleries, but also can arrange test drives and can service cars.