The deal requires Michigan buyers to title their cars elsewhere, but they'll be able to purchase them without leaving the state, in a deal to be finalized in federal court this week.

CarAndDriver, By Mihir Maddireddy

© CarAndDriver | Tesla Will Soon Get to Sell Cars in Michigan—But There's a Catch

Tesla hasn't been allowed to sell or service its vehicles in Michigan, so customers had to travel elsewhere for both.

The automaker couldn't even discuss sales with customers in Michigan but will now be allowed to under a settlement currently in the works with the U.S. District Court, Reuters reported.

Assuming the agreement is finalized, Michigan Tesla buyers can take delivery at home but will have to title their new cars in a different state or Canada and then transfer the title to Michigan.

It’s tough to buy and own a Tesla in Michigan. For starters, there aren't any places allowed to sell you one; you have to physically go to another state to buy the car. C/Dused Hearst Autos' fleet-rental company in North Carolina to complete the purchase of our long-term Tesla Model 3, which was delivered to the adjacent state of Ohio, where we picked it up. This leads to consumer-unfriendly experiences such as when our Model 3 broke down and had to be towed to Ohio. A new settlement between Tesla and the state of Michigan, reportedly about to be finalized in U.S. District Court, should allow the California EV carmaker to directly sell to customers in Michigan.

Tesla filed the lawsuit in U.S. District Court in 2016 to overturn Michigan's ban on automakers selling directly to the public. Details of the settlement, as Reuters reported, are expected Wednesday. Reportedly, when it's finalized Tesla will be able to sell cars in Michigan, but they will have to be titled in another state or Canada, then transferred to Michigan. In that sense, this settlement doesn't fully fix the issue of Tesla's direct sales in Michigan. It provides more of a workaround to the existing problem of having to travel outside the state to purchase a Tesla.

Tesla's lawsuit had claimed that a bill signed into law in 2014 by then-governor Rick Snyder was an anti-Tesla move that favored the likes of Ford, GM, and FCA, all of which are headquartered in Michigan. The EV maker also said at the time that the law was "harmful to consumers."

Unlike most carmakers, which operate franchised dealerships with lots filled with cars, Tesla has opted for an unorthodox path when it came to getting cars into the hands of consumers. Instead of filling up dealership lots with cars, Tesla decided to open small stores in areas with high visibility, like shopping malls. In Michigan, that's the high-end Somerset Collection shopping mall in Troy, a northern suburb of Detroit (pictured at top). At this Tesla location, representatives from the company are not permitted to discuss pricing or sales with potentially interested customers; instead, they direct them to Tesla's website or to outlets in other states that allow direct sales to the consumer.

Tesla is fighting similar battles in other states, including Texas and Connecticut, where the company is pushing for a license to be able to sell directly to customers. Tesla's argument is that it can't be said to be violating dealers' rights if the company doesn’t have any dealerships.

This article was originally published in CarAndDriver.
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