Tesla buys Michigan auto supply firm despite being banned from selling cars in the state

8 May 2015

Tesla Motors is acquiring a Michigan-based auto supplier, despite not actually being allowed to sell its vehicles in the state.

According to a Detroit Free Press source, Tesla has agreed a deal to purchase Riviera Tool, a Grand Rapids-based company that builds stamping die systems, the hardware that punches large sheets of metal into car parts. The firm will be renamed Tesla Tool & Die and no jobs will be lost because of the transition, said the source.

Michigan’s governor Rick Snydersigned a controversial law last October that banned Tesla from selling its vehicles directly to the public. All automakers are currently required to sell through franchised car dealers in the state – the same outlets that claimed Tesla would have an advantage if it was allowed to sell vehicles directly to consumers.

“The dealers seek to force Tesla, a company that has never had a franchise dealership, into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers,” read a Tesla blog post published at the time. “In so doing, they create an effective prohibition against Tesla opening a store in Michigan.”

At the Automotive News World Congress event in Detroit last January, Tesla CEO Elon Musk told reporters that building a plant in Michigan at some point was “not out of the question”.

“Maybe Michigan shouldn’t stop us from selling cars here. That would be a nice gesture,” he joked.

In any event, this new deal with Riviera Tool has little to do with selling to the public, but instead will help Tesla improve the efficiency of its manufacturing processes. Terms of the deal have yet to be disclosed.


Dean Van Nguyen was a contributor to Silicon Republic