Ever wondered why you can’t just go to a store and buy a new car? Why must you haggle at a dealership?

You can find the reason in state law. In Wisconsin, auto manufacturers are prohibited from selling directly to consumers. Instead, they must sell their vehicles to dealerships, which then sell them to the public.

The state’s nearly 35-year-old, explicit ban on direct sales has ignited an ongoing legal dispute between the state and Elon Musk’s electric vehicle company, Tesla.

But Wisconsin isn’t an outlier.

Seventeen states bar direct sales, while 18 states allow them, according to a 2020-2021 report from the National Conference of State Legislatures. Laws in the remaining states fall somewhere in the middle of this balance.

The Wisconsin law at the center of the Tesla dispute says “A factory shall not, directly or indirectly, hold an ownership interest in or operate or control a motor vehicle dealership in this state.”

Industry and legislative history

The Wisconsin State Legislature enacted the factory store rule in 1993 after the Wisconsin Automobile & Truck Dealers Association lobbied to expand protections for car dealers, said Madeline Kasper, an analyst with the Wisconsin Legislative Reference Bureau, in an email.

But restrictions on manufacturers operating auto dealerships in Wisconsin date back to the mid-20th century and were first enacted to protect dealerships from having to compete with auto manufacturers, Kasper said.

The practice of selling new vehicles through dealerships began as the auto industry expanded in the early 20th century. Manufacturers partnered with independent dealers so they could prioritize and invest in the production of cars rather than their distribution.

Before states intervened on behalf of dealerships, manufacturers could force dealers to accept cars regardless of whether the dealer wanted them and could terminate contracts with dealerships for no reason, wrote Daniel Crane, a law professor at the University of Michigan who teaches legislation and regulation, in a 2016 paper.

Prohibiting manufacturers from selling directly to consumers was meant to limit manufacturers’ ability to unfairly compete by selling the same types of cars sold by the dealer, Crane said.

Tesla has attacked the current interpretation of the factory store rule, noting that Tesla can’t compete with dealerships because dealerships don’t sell Tesla products.

“That rationale is completely inapplicable to non-franchising manufacturers, like Tesla, who have no franchisees they could possibly exploit,” the company wrote in its court filings.

The suit may end up before the Wisconsin Supreme Court, which made Musk’s heavy involvement in the recent election for an open seat on the court — he unsuccessfully spent about $20 million trying to get the right-leaning candidate elected — eye-raising.

more from wisconsin watch

Has Elon Musk’s PAC in the 2025 Wisconsin Supreme Court race set the record for outside spending on state court elections?

Vicious ads, record spending, Elon Musk: Wisconsin Supreme Court race reflects nasty, new normal

The state-imposed limits on direct sales began to loosen in 2014, two years after Tesla debuted its second car, Crane explained in another paper.

Looser restrictions on sales are essential for electric vehicles to compete with the better-established auto companies, and the traditional dealership model is ill-suited to their sale and service, Crane argues.

New car dealerships’ contribution to state tax revenue isn’t insignificant, however. 

The tax revenue from the sale of vehicles both new and traded-in as well as parts, accessories and repairs at new car dealerships in Wisconsin was nearly $600 million in 2024, according to the Department of Revenue. This accounted for nearly 8% of the state’s $7.6 billion in total sales tax revenue last year.

Tesla and Wisconsin 

In Wisconsin, Tesla operates two galleries in Madison and Milwaukee, but neither can sell vehicles or even discuss pricing or promotions. Wisconsin residents who wish to purchase a Tesla must do so online or visit a neighboring state that doesn’t impose direct sales restrictions.  

In December, Tesla requested dealer licenses in Dane and Milwaukee counties, hoping to convert its two gallery locations to dealerships. 

When a state agency rejected the requests, the company filed suit on Jan. 15 in Outagamie County Circuit Court, raising questions of judge shopping.

The company said that it is a licensed motor vehicle dealer in 30 states and Washington, D.C., and that Wisconsin residents purchased between 3,000 and 4,000 of its vehicles last year.

The company prioritizes direct sales, saying that the model is better for its consumers, who, the company says, prefer its uniform prices and “middleman-free experience.” 

Tesla argues that it qualifies for an exemption to state law because car dealers could not own and operate a dealership selling Tesla products “in a manner consistent with the public interest and that meets the reasonable standard and uniformly applied qualifications of the factory.”

After initially filing in Outagamie County, where no Tesla showroom exists, the court transferred the case to Milwaukee County in March, according to online records.

This article first appeared on The Badger Project and is republished here under a Creative Commons license.

The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.

Wisconsin bans auto manufacturers from selling directly to the public. Here’s why. is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

When a journalism nonprofit asked the Wisconsin Department of Justice in 2020 for the names and work histories of all law enforcement officers in the state, the agency initially appeared ready to grant the request.

But the department received pushback from law enforcement groups, and the records were not released.

This new information came to light in documents recently obtained by The Badger Project in its lawsuit against the state DOJ. The suit is seeking the names and work histories of most law enforcement officers in Wisconsin. The Badger Project’s co-plaintiff in the suit is the Invisible Institute, the journalism nonprofit that made the 2020 request.

Other news organizations, including the Washington Post, had seen similar requests rejected by the Wisconsin DOJ in preceding years.

In 2024, after the state DOJ denied another request for police names and work histories, this time from both the Invisible Institute and The Badger Project, the organizations sued for access.

In March, as part of the regular evidence exchange in the case, called discovery, the state DOJ released hundreds of documents to the two journalism nonprofits.

Among the documents was a letter sent by Assistant Attorney General Paul Ferguson, who heads the state DOJ’s Office of Open Government, to every police chief in the state. The letter indicated that the state DOJ intended to fulfill the request and release a list of all law enforcement officers in the state, but asked the individual agencies to identify any undercover officers who should not be included in that list.

The Wisconsin Chiefs of Police Association responded with a letter to Wisconsin Attorney General Josh Kaul the next day and urged the department to reverse itself, according to the documents obtained by The Badger Project.

Kenneth Pilegge, the association’s vice president, wrote that he had “significant concerns” in the letter.

“We have had contacts with members within our membership that have very serious concerns with this release and adamantly oppose this release without a court review,” he continued.

Neither the state DOJ nor the Wisconsin Chiefs of Police Association gave a comment for this story when offered the opportunity to do so.

Kaul assumed the position of attorney general, the head of the Wisconsin Department of Justice, in 2019. The department previously rejected the request for a full list of law enforcement officers’ names and work histories several times before he became AG, according to the released documents.

Dozens of states — including Minnesota, Illinois and Iowa — have released a full list of their law enforcement officers to a nationwide reporting project, which includes the Invisible Institute and The Badger Project.

The Wisconsin DOJ has, in response to repeated requests, released a list of “flagged officers,” those who lost their jobs due to termination, resignation in lieu of termination, or resignation prior to completion of an internal investigation.

This list, however, does not include officers who were fired or forced out of law enforcement jobs in a different state before taking a position in Wisconsin.

In previous denials, Ferguson has cited concerns that a complete list could “endanger” undercover officers and pose a general risk to officers and their families in a “volatile environment.”

The state DOJ says it isn’t able to identify undercover officers and redact their names.

Wandering officers

In Wisconsin, police and jailers who were fired or forced out of a previous job in law enforcement only to get hired at another one, called wandering officers, increased by 50% from 2021 to 2024. 

The total number of law enforcement officers in Wisconsin is sitting near record lows, according to investigations by The Badger Project. So the pressure to hire previously fired or forced-out officers can be high, experts say. Chiefs and sheriffs need to fill positions, and officers fired or forced out from previous jobs already have their certification, which costs law enforcement agencies and new recruits time and money to obtain. Wandering officers are more likely to again commit misconduct on the job, studies have suggested.

A full list of names of law enforcement officers, including those separated from jobs outside of Wisconsin who now hold positions in the state, would alleviate a considerable information gap, the Invisible Institute and The Badger Project argue in their lawsuit.

The records requested would not include home addresses or family information.

The lawsuit

The Badger Project’s lawsuit is being funded by The National Freedom of Information Coalition, through grants from the John S. and James L. Knight Foundation and the Society of Professional Journalists’ Legal Defense Fund. 

The Wisconsin Transparency Project, a law firm dedicated to enforcement of the state’s open records laws, along with the University of Illinois First Amendment Clinic, filed the suit on behalf of the plaintiffs.

The parties are submitting written arguments, called briefs, to Dane County Circuit Court, and then the judge will likely rule on the case, said Tom Kamenick, lead attorney for the Wisconsin Transparency Project.

This article first appeared on The Badger Project and is republished here under a Creative Commons license.

The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.

Wisconsin Department of Justice withheld officer roster after police group pushback is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.