Tesla Chief Executive Officer Elon Musk has plenty of reasons to smile these days. Aside from seeing a surge in stock in just a matter of months, the American automotive and energy company has finally settled a direct-to-consumer sales lawsuit in Michigan.
In a report from Bloomberg.com through people familiar with the matter, Tesla Inc. has reached a settlement with the state of Michigan over a federal lawsuit on the state ban on direct-to-consumer sales. This means that Tesla can soon open service centers in the state through a subsidiary. However, the report added that customers still need to title their cars in another state and transfer them to Michigan. Regardless, the bottom line is that Tesla can now deliver a car that was bought in Michigan.
Though considered a partial victory, it does resolve a long-standing issue in the state of Michigan. With Tesla unable to set shop, the company settled to open small stores at shopping malls and other visible locations. The impending settlement should change all that. Previously, the lone Tesla gallery in the state could not discuss transactions such as trade-ins, payments, and anything related to vehicle sales. All that is expected to change soon with the filing expected to happen Wednesday (Jan. 22) at the U.S. District Court.
Also, it aligns with the vision of Musk. Last year, the 48-year-old CEO pointed out that service centers would be the key to growing sales. Once they are able to put up their service centers, this could mean more success to the company who saw a record surge in stocks in just six months.
“You’ve got to have service, you have to have the supercharging and charging all sorted out, good consumer financing, and then the price must makes sense,” said Musk. “Any place where those four things are true, our sales are great. So we’re rolling out service centers like crazy.”
In a way, this should somehow ease the belief that Tesla could encounter a sudden twist of fortune at some point. In an earlier post, it was reported how Bernstein analysts were left befuddled by the extremely unusual surge of Tesla stocks which doubled in under six months.
According to analysts, historical trading data shows that companies with stock holding a market value of $20 billion took a turn, although there were some factors not included. Now, the partial win of Tesla in Michigan could provide a new twist to all that with Musk believing that service centers can only push the company upward even more.
