FILE PHOTO: Philip Floyd, senior engineering technician for the Insurance Institute for Highway Safety (IIHS), demonstrates a front crash prevention test on a 2018 Tesla Model 3 at the IIHS-HLDI Vehicle Research Center in Ruckersville, Virginia, U.S., July 22, 2019./File Photo

(Reuters) - Tesla Inc TSLA.O has reached a settlement with Michigan to allow the electric-car maker to directly deliver its vehicles to customers in the state, a person familiar with the agreement said on Tuesday.

The company will be able to deliver vehicles within Michigan, but will have to issue titles for the vehicles in another state, which the customers can then transfer to Michigan, the person said.

Tesla sued Michigan officials in 2016 after the state refused to allow the company to sell cars directly to consumers instead of through franchised dealerships.