Tesla will be able to sell and service its vehicles in the back yard of Detroit’s three automakers under a lawsuit settlement, a person briefed on the matter says.
The settlement between the office of Michigan Attorney General Dana Nessel and Tesla is likely to be announced Wednesday, says the person who asked not to be identified because terms of the deal haven’t been made public.
The settlement would end a Tesla lawsuit against the state over a law that banned company owned stores and stopped Tesla from opening service centers.
The settlement could cause other states that have stopped Tesla from selling to follow suit.
Thousands of Teslas are on the roads in Michigan but must be sold and serviced out of nearby Ohio or another state.
The person says that under the deal the Teslas will have to be titled in another state and then transferred to Michigan.
Under the agreement, Tesla will sell and service the vehicles under a subsidiary, the person said.
The company now has what it calls a “gallery“ at a shopping mall in the Detroit suburb of Troy, Michigan. But employees there are now barred from talking about pricing or lease terms or from completing sales deals.
The agreement would allow Tesla to deliver vehicles in Michigan, the person said. Currently buyers have to leave the state to pick up their vehicles.
Nessel released the following statement about the settlement:
“Today the state of Michigan defendants Secretary of State Jocelyn Benson and Attorney General Dana Nessel filed a stipulation to dismiss with Tesla that recognizes that any Michigan resident may lawfully buy a Tesla and have it serviced in Michigan. The stipulation acknowledges that Tesla may: operate under existing Michigan law; sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan; and, indirectly own service and repair facilities in Michigan through a subsidiary, Tesla Michigan.”