Ohio dealers pushing for legislation barring Tesla stores

Article by Anita Panait, on February 18, 2014

Auto dealers in Ohio are renewing efforts to block Tesla Motors' factory store model. Specifically, the Ohio Automobile Dealers Association is pressing for a legislation that will amend the state's dealer franchise law to more explicitly bar factory-owned stores. Association leaders claim that Ohio's existing law should have banned Tesla from receiving licenses for its stores in Cincinnati and Columbus.

"The legislation reinforces what we've always believed the laws to be: that a manufacturer cannot hold a dealer's license to sell vehicles at retail," remarked Sara Bruce, the association's vice president of legal affairs. "If there was any misunderstanding of what the law is or what the definition of a new motor dealer is, this certainly does clarify it," she said.

An executive for Tesla reiterated that its stores in Ohio comply with current state law and that the carmaker properly applied for and received the licenses. Diarmuid O'Connell, Tesla vice president of business development, said that the carmaker’s approach doesn't hurt existing dealerships.

"We're not out to eviscerate the dealer business model," O'Connell told Automotive News. O'Connell remarked that they will simply introduce a new technology in the manner they think is most effective. The dealers association and some of its members are also considering whether to appeal the dismissal of their lawsuit against Tesla and the Ohio agencies in charge of issuing dealer licenses. 

A court magistrate dismissed the lawsuit on Feb. 6, saying that plaintiffs lacked standing to sue. Tesla executives and representatives from the Ohio dealers association testified Tuesday and last week on the proposed legislation at Ohio Senate committee hearings.

Dealers association also hopes to amend the statute in 2013 but failed. James Chen, Tesla vice president of regulatory affairs, told senators that passage of the amended bill would limit consumer choice, prevent inter-brand competition and allow Ohio dealers to establish a monopoly that current law bans.

Topics: tesla, dealership

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