Tesla Motors, Ohio Auto Dealers Come to Agreement on Direct Sales
March 27, 2014 3:50 PM
comment(s) - last by
Tesla can continue selling its EVs directly
In a big win for Tesla Motors' auto dealership battle, the state of Ohio will allow the automaker to sell its electric vehicles directly to customers. According to
, Tesla Motors and the Ohio Automobile Dealers Association negotiated the deal Tuesday, and it was approved by a Senate panel.
This means that Tesla can continue selling its $69,900+ Model S sedan EV directly to customers in both of its existing Ohio stores -- which are in Columbus and Cincinnati.
Even better news for Tesla is that it can open a third store Cleveland as well, but it won't be allowed to open any more than that.
The bill also made sure to prohibit other automakers from opening manufacturer-owned stores in the state of Ohio. This ensures that others can't follow Tesla's path and try to get rid of auto dealers altogether.
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).
Elon Musk [SOURCE: Green Optimistic]
But auto dealers say that 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 was granted authorization by Republican Gov. John Kasich through the Bureau of Motor Vehicles to sell its EVs directly to customers via an issued license.
Earlier this month, it was reported that Ohio auto dealers were
supporting a bill
that would stop Tesla from opening stores outside of its only two locations in Ohio.
It recently came to light that Ohio Sen. Tom Patton (R-Strongsville) backed the anti-Tesla 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.
But this recent agreement with Ohio auto dealers is a win for Tesla, especially when other states -- like New Jersey -- are giving Tesla the boot.
Earlier this month, New Jersey Gov. Chris Christie’s administration
proposed a new rule
, which requires a person to have a franchise agreement with an auto manufacturer in order to be granted a license to sell.
A week later, 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. These now need to become showrooms as of April 1.
On the other side of the country, states like Texas and Arizona are
rethinking Tesla's direct sales model
(which they currently ban as well) in order to secure Tesla's giant new Gigafactory for EV batteries. The factory aims to supply batteries for up to 500,000 EVs by the year 2020. The gigafactory would cost $5 billion USD, span as much as 1,000 acres, and employ about 6,500 people. It would also largely be powered by renewable energy, hence its need to be in a Southwestern state.
This article is over a month old, voting and posting comments is disabled
3/28/2014 3:55:50 PM
Give the auto maker choice to let them and customers to decide how to deliver the cars!
"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson
Texas Gov. Rick Perry Would Take Another Look at Anti-Direct Sales Rules for Tesla's $5B Gigafactory
March 24, 2014, 6:59 PM
Ohio Auto Dealers Support Anti-Tesla Bill
March 19, 2014, 2:30 PM
Hot Air? President Obama, G7 Pledge to Eliminate Most Fossil Fuel Use by 2100
June 8, 2015, 5:40 PM
Study Predicts Self-Driving Vehicles Could Rake in Billions
March 6, 2015, 8:34 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Most Popular Articles
F-16 Schools Trillion-Dollar F-35 in Mock Combat, Fleeing is Best Option Pilot Admits
July 1, 2015, 5:53 PM
Apple Music: The Money, The Launch Hiccups, and the Nitty Gritty Details
June 30, 2015, 5:09 PM
Quick Note: Lumia 940 XL "Cityman" Phablet Gets Teased Via Tests
June 29, 2015, 5:51 PM
SpaceX Falcon 9's Seventh Supply Mission to ISS Ends w/ Fiery Stage 1 Explosion
June 28, 2015, 1:10 PM
Windows XP, Vista Users Can Get Free Windows 10 Upgrade Thanks to Loophole
June 23, 2015, 2:23 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information