Tesla Motors Inc vehicles direct sales are banned in the state of Michigan. But as per a report, the Michigan Department of Treasury has around 339,623 shares – worth $72m – invested for state retirement funds in Tesla stock.
Increased stake in Tesla
Tesla is not given a permission to sell cars directly to the customers in almost 50% of the American states even after years of struggle. But, there are few states that do not even let the electric car maker to give test drive to potential customers, one of them is Michigan.
Still, the state Treasury increased its shares in EV firm by 224% in the Q2, reported the Detroit News. It also said that overall they bought about $48m worth of shares. A Treasury spokesman said in an email to The Detroit News that “all investment decisions are made by a team of portfolio managers that are independent of state regulatory agencies.” By the end of March 2016, the retirement fund owned 104,821 Tesla shares, which it has increased considerably now.
In a statement to The Detroit News, the Treasury Department said that their original $25m position in the EV maker was relatively minor, and they added around $50 million during the past quarter. “The additional shares did not materially add to the risk of the overall $60 billion investment portfolio,” they said. The newspaper further reported that the Tesla’s stock of the fund alone represents 0.12% of states $60bn portfolio.
The paper reported that the Michigan Department of Treasury owns shares of General Motors, supplier Delphi Automotive and Ford Motor as well. The department has $13.7m stake in GM and $17m investment in Ford, which compared to Tesla Motors Inc is far less. In addition, it has shares worth over $84m in Delphi Automotive. It owns shares in other popular firm like Facebook, Amazon.com, Wells Fargo & CO. and Apple as well.
Michigan – a big challenge for Tesla
The state of Michigan is the most public and biggest thorn in Tesla Motors Inc ’s efforts to try to start shop in the five states that it is banned from. In November 2015, about a year after Gov. Rick Snyder signed a bill prohibiting the direct sale of cars to the consumers, the EV firm applied for a Michigan dealership license.
Just last week, Diarmuid O’Connell – Tesla VP of business development – singled out the Detroit market as a difficult place to find electric cars. Indirectly calling attention to the state’s ban on the direct sales of electric cars, O’Connell said “I think if the Michigan Legislature would allow Tesla to sell cars in Michigan, we could probably address this.” Speaking to Automotive News, the executive said the automaker has been quite certain that it would only sell its cars under a direct-sales model.