FTC Staff Urges Michigan to Consider Allowing Direct Car Sales
Staff members at the Federal Trade Commission are imploring Michigan to open the door to direct sales by Tesla Motors Inc. and other car makers, reported The WSJ. In a letter sent to Michigan state Sen. Darwin Booher by the commission staff members, the agency urges the state legislature to “consider abandoning the direct sales ... Read More »
Staff members at the Federal Trade Commission are imploring Michigan to open the door to direct sales by Tesla Motors Inc. and other car makers, reported The WSJ.
In a letter sent to Michigan state Sen. Darwin Booher by the commission staff members, the agency urges the state legislature to “consider abandoning the direct sales prohibition in Michigan’s existing law, and instead permit manufacturers and consumers to re-engage the normal competitive process that prevails in most other industries.”
In October 2014 Michigan passed a law that prohibited direct sales. There is a senate bill pending that would modify the language to allow direct sales of “autocycles” — which would presumably allow direct sales for Elio Motors, a startup planning to sell a three-wheeled carlike vehicle.
The FTC’s letter stated it was in response to a request for comments by Mr. Booher on the pending Senate bill.
Tesla has fought car dealers state by state in its efforts to sell cars directly to consumers without independent dealers. The Silicon Valley car maker has said dealers won’t understand how to market the electric vehicle. Meanwhile, independent dealers don’t want car makers to have a precedent in cutting them out of the sales channel.
Michigan, Arizona and Texas are the only states where Tesla can’t sell direct to consumers from retail outlets. People in those states can buy cars online from California and have them shipped to their homes.
At the time of the passage of the law, Gov. Rick Snyder said he hoped the legislature would address the issue again. A spokesman for the governor didn’t respond Tuesday to a request for a response to the letter.
It isn’t the first time the FTC has weighed in on the issue. The commission staff previously had written similar position pieces protesting the efforts by some states to restrict Tesla’s direct sales efforts.
In many states, Tesla has come to an accommodation with dealers by agreeing to limit the number of stores in the state.
Tesla stated in response to the letter: “We agree wholeheartedly with the FTC. States should not limit how consumers buy their cars.”
More Industry

Autos More Appealing
Consumers gave new cars better scores again this year for design, performance and more as mass-market brands kept gaining on premium lineups, JD Power found in an annual poll.
Read More →
Used EVs Defy Overall Market
While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.
Read More →
Gone to the Dogs
A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
Luxe N.C. Dealerships Change Hands
A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.
Read More →
Exposure Drives Interest in Chinese Cars
At a recent demonstration, consumers had the chance to ride in a Chinese-branded vehicle, a firsthand experience that improved their perceptions and purchase intent.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Agent Advocate
Rob Mancuso, who comes from a long line of auto dealers, values general agents’ place in the industry and makes a case for them taking an even bigger seat at the table.
Read More →
Driving Under Distraction
Though consumers gave higher marks to new vehicles in JD Power’s most recent initial-quality poll, high-tech interference worsened, pointing to craving for simplicity.
Read More →
Affordable New Cars a Thing of the Past
More than one out of five new vehicles sell for more than $60,000, according to Edmunds. That's up 7% compared to prepandemic 2019.
Read More →