Ohio Auto Dealers Support Anti-Tesla Bill
March 19, 2014 2:30 PM
comment(s) - last by
They want to stop the automaker from building new store locations
Tesla Motors just can't catch a break with this auto dealership fight as New Jersey recently banned direct sales, and now
is looking to do the same.
The Detroit News
, Ohio auto dealers are supporting a bill that would stop Tesla from opening stores outside of its only two locations in Ohio.
Tesla currently has stores in Cincinnati and Columbus, where direct sales are allowed. The automaker was granted this authorization when Republican Gov. John Kasich -- through the Bureau of Motor Vehicles -- issued Tesla a license to do so.
But auto dealers believe that Tesla's direct sales model could branch out to many more locations, and eventually, other auto manufacturers could even follow suit. If this were to happen, auto dealers would be out of a job.
Ohio auto dealers took legal action against Tesla's two stores, but it didn't fall in their favor. So now, the dealerships are pushing for a new bill that would prevent Tesla from opening more locations.
“The bill would shut down our ability to grow in the Ohio market and, frankly, it’s just a first step to them shutting down our existing businesses,” said Tesla Vice President Diarmuid O’Connell. “This is the pattern we see in other states."
[SOURCE: The Car Connection]
According to auto dealers, they are necessary middlemen between auto manufacturers and consumers. They've insisted that their role provides fair play for consumers when it comes to warranties and service issues.
Tesla feels differently. Tesla CEO Elon Musk said that auto dealerships don't do a very good job at selling specialty cars like Tesla's high-end electric vehicles (Roadster, Model S). Hence, he's looking to run his own Tesla stores around the U.S. where he believes his cars will get a fair shot at being sold.
The problem is that auto dealers don't want to sell Tesla vehicles, and they're also barring Tesla from selling its own vehicles (with the exception of online, where customers can physically touch or test drive the EVs).
It recently came to light that
Ohio Sen. Tom Patton
(R-Strongsville) backed the bill -- called Senate Bill 260 -- which aims to prevent Tesla and any other automaker from "applying for a license to sell or lease new or used motor vehicles at retail." What's interesting is that Patton received at least $42,825 between 2002 and 2013 from state and national auto dealership owners, employees, and political action committees.
Auto dealers spent $86.8 million on state election races across the U.S. between 2003 and 2012. They also spent $53.7 million on federal campaigns. Tesla, on the other hand, has spent less than $500,000 on both state and federal politics.
The deep pockets of auto dealers is what Tesla believes is the cause for the recent direct sales ban in New Jersey. Earlier this month, New Jersey Gov. Chris Christie’s administration
proposed the new rule
, which requires a person to have a franchise agreement with an auto manufacturer in order to be granted a license to sell.
Then, last week, the New Jersey Motor Vehicle Commission voted in favor of the ban of direct auto sales. Tesla already operates two stores in New Jersey, and had plans to open more before this new rule.
wrote his frustrations
in a blog post titled, "To the People of New Jersey" on the Tesla Motors website. Musk said Christie's "protection" of consumers is similar to that of the mafia, and even brought up the Bridgegate scandal.
The Detroit News
This article is over a month old, voting and posting comments is disabled
RE: Big Business
3/19/2014 11:28:48 PM
I love the Republican bashing.
The only reason we have the situation we're in today, is because of Democrats. Namely Obama. He bailed out Detroit, and he bailed out dealerships with "Cash for Clunkers".
That's right, Cash for Clunkers was nothing but a direct dealership bailout on our dime. It was the same as cutting the NADA a huge check.
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