Tesla is yet faced with another hurdle in pushing their products forward. The California-based start-up has been denied to sell their vehicle in Michigan as ruled by the state's secretary of state.

The decision came down on September 7 after the conclusion of a hearing that review the state's initial motion to deny the automaker's request for a license submitted in November 2015. The said application - if green-lighted - would have allowed Tesla to sell electric vehicles in storefronts in the state.

Grounds for the denial isn't in the growing controversy regarding the automaker's auto-pilot feature but is rather based on the company's direct-sales model.

The state's law specifies that "a vehicle manufacturer shall not ... sell any new motor vehicle directly to a retail customer other than through franchised dealers." Though presented with yet another legislative battle, Tesla said in a statement that it has no plans in changing the way they operate.

"Tesla sells its cars directly to consumers all over the world, and seeks to do the same in Michigan," the company wrote in its correspondence with the Secretary of State. "Tesla has never sold its cars through an independent, franchised dealer."

States that has also barred the automaker from selling their products are Texas and Iowa. Gallery locations in Texas allows Tesla to display their electric cars but that's just as far as the state is allowing the company to move forward at the moment.

Tesla will likely take legal actions against states that are barring it from implementing their direct-sales model, according to The Wall Street Journal. Michigan is also likely seen as an integral part of the company's growth given that it's the most populated state without a Tesla store or gallery.

While Tesla is currently unsuccessful in permeating Michigan's market, it has seen recent success in the state of Arizona. The Arizona Department of Transportation has allowed the automaker to practice their direct-sales model after an Arizona judge found that the DOT had wrongfully denied Tesla a new motor vehicle license in May.

The ruling is effective immediately granting the company legal rights to sell their vehicles in the state through its existing gallery in Scottsdale. Tesla is also reportedly working on several more sites at undisclosed locations.

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