FTC Chides Michigan For Banning Direct-To-Consumer Vehicle Sales, Like Tesla

The FTC has come out defending auto manufacturer's right to direct-to-consumer sales. The regulatory agency claims this is much bigger than Tesla, which has been getting all the press from forgoing dealerships and selling its electic vehicles directly to consumers, aggravating conventional manufacturers. The FTC's latest post is a direct comment on Michigan's new, legislation which has yet to be passed.

If approved, the bill will selectively lift the ban on direct-to-consumer auto sales. Don't get your hopes up. The automotive hub of Detroit isn't about to let manufacturers bypass dealerships on their way consumer sales. The only vehicles to be effected by the new legislation–if it passes– will be a special category of vehicles called "autocycles."

The FTC hopes that Michigan's small concession will "open the door for direct consumer sales by another potential new entrant in auto manufacturing." An example this kind of new vehicle is a Elio Motors new three-wheeled autocycle and the Toyota i-ROAD which we got to drive, hands on.

The FTC has been vocal in the past with its comment letters to legislators over sales restrictions.

The FTC goes on to chide Michigan law-makers,

"Protecting dealers from abuses by manufacturers does not justify a blanket prohibition like that in the current Michigan law, which extends to all vehicle manufacturers, even those like Tesla and Elio who have no interest in entering into a franchise agreement with any dealer."

The government agency is behind the movement for direct-to-consumer-sales not only for Tesla but for all manufacturers. The FTC believes that, "consumers would be better served if the choice of distribution method were left to motor vehicle manufacturers and the consumers to whom they sell their products." I actually agree with the agency on this point, as long as the FTC is only offering opinions instead of enforcing new government regulations.