By Melissa Burden, The Detroit News
Tesla Motors Inc., which can’t legally sell a car in Michigan, has opened a gallery showroom at Nordstrom in Troy’s Somerset Collection where consumers can look — but not buy.
The Palo Alto, California-based electric carmaker on Thursday opened a 700-square-foot Tesla Gallery on the first floor of the department store, Nordstrom store manager Stephanie Johns said. Tesla confirmed the gallery, which is staffed with Michigan Tesla employees and showcases a single white Model X SUV, will be open for at least six months. It’s the first Tesla gallery in the state.
While the showroom near the women’s handbags and jewelry department is open for browsing, if consumers want to buy a car, they cannot do it in Troy. A sign refers people online for product details and ordering information. Tesla gallery staff typically can answer some questions but can’t discuss pricing and or even offer test drives.
Customers who want one of Tesla’s electric vehicles would have to order from Tesla’s website and have it delivered, or pick it up at a retail store in Cleveland, Columbus, Chicago or other cities where Teslas are sold. About 400 registered Teslas are already in Michigan.
The Michigan Secretary of State’s office, which denied Tesla’s new-dealership license request in September, said Monday it is aware of Tesla’s gallery and will be “reviewing what Tesla is doing at that location,” spokesman Fred Woodhams said.
Tesla has been fighting to win the right to sell and service vehicles in Michigan for several years.
In October 2014, Gov. Rick Snyder signed a law banning automakers from selling vehicles directly to consumers. The legislation, passed overwhelmingly by the Michigan Legislature, was backed by the state’s new-car dealership lobby. The law closed a loophole that Tesla has used in other states to maintain company-owned retail stores and bypass the dealership route.
The governor said then that the law “clarifies and strengthens” an existing long-standing law that prohibited direct sales of new cars in Michigan. Previous state law prohibited automakers from selling new vehicles directly to retail customers except through its franchised dealers; the revised law removed the word “its,” which Telsa viewed as a strike against the company.
Terry Burns, executive vice president of the Michigan Automobile Dealers Association, said Monday that it has no issue with Tesla’s new gallery because it appears not to be selling vehicles and is following state law.
“If they display a vehicle like shirts at Nordstrom, they’re abiding by the law,” he said.
In February, state Rep. Aaron Miller, R-Sturgis, introduced House Bill 5312 that would allow Tesla and other automakers to directly sell to consumers. But the legislation has not moved.
Tesla in September filed a federal lawsuit against Snyder, Secretary of State Ruth Johnson and Attorney General Bill Schuette. The lawsuit challenges that Michigan’s law requiring new cars be sold through franchised dealers is unconstitutional. Tesla wants the right to sell vehicles directly to consumers. State officials have yet to respond to the complaint.
“In Michigan, it’s very unfortunate that residents of Michigan have to drive to Ohio and Illinois in order to pick up their cars, in order to have their cars serviced,” Diarmuid O’Connell, Tesla’s executive vice president of business development, told reporters at a Romulus event in September. “That’s a disservice to citizens of Michigan.”
Tesla owns and operates a tool and die 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 selling directly to car buyers. In Texas, for example, it operates galleries, but also can arrange test drives for and can service cars.
The automaker’s sale approach differs from the traditional auto industry in which manufacturers partner with dealers to sell vehicles. Tesla prefers to have small showrooms or galleries in high-traffic locations and a no-pressure environment where staff answer customers’ questions. The electric-vehicle maker has opened similar gallery stores at Nordstrom stores in Los Angeles and Charlotte, North Carolina.
Staff writer Michael Wayland contributed.