Auto dealers in Ohio seek to stop Tesla’s way of direct selling …

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Auto dealers in Ohio to stop Tesla’s way of direct

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Days before Tesla opens a dealership at Easton, its in Ohio, a proposal in the General seeks to ban the company’s business

The measure, a one-paragraph amendment to an bill, says that an manufacturer cannot also own an dealership.

Tesla is a relatively new and intends to own all of its own dealerships. Nearly all auto dealerships in the country are

Tesla executives say this move is the latest salvo in an battle with the automotive which views company-owned as a threat. Those fears company-owned dealers getting access to new vehicle lines or direct sales to consumers, franchise dealerships.

“This, for all intents and purposes, down our operations,” said Chen, Tesla Motors’ president of regulatory affairs and general counsel.

Tesla, a maker of all-electric cars, has similar attempts to prohibit dealerships in Massachusetts, Minnesota, New and North Carolina.

In other such as Texas and Arizona, already were laws in that bar automakers from car dealerships.

Rather than stores in those states, has retail “galleries” in which can look at the cars, but they take a test drive or a purchase. Customers must a toll-free number or go online to pricing and make delivery

State franchise laws designed to prevent automakers opening company-owned stores, would have an unfair if they competed in the same with independently owned selling the same brands, Rhett Ricart, co-owner of Automotive in Groveport.

Tesla is not covered by many of the laws because it doesn’t any independent franchises.

Dealers long argued that the industry works better independent retailers are sharing in the and the profits, and Ricart has concerns the model could unravel if states open the door to stores.

“Tesla is Armageddon,” he

If Tesla succeeds with its Ricart thinks that auto manufacturers will by introducing new brands and selling to consumers. This would shockwaves through Ohio’s dealerships, a group that more than 36,000

One industry observer doubts the effects would be as dramatic as fear but says they reason to be concerned.

“Dealerships can be profitable businesses from a and service perspective, and (franchise do not want to see that go away,” Ed Kim, vice president for analysis at AutoPacific, a research in Tustin, Calif. “If does it, then that the precedent for other automakers to do

Tesla said last that it will open its stores in Ohio, with an outlet set to open on Friday and one in on Dec. 13. Its only other presence is a service center in that opened last

If the legislative proposal becomes it would take effect 100 days later. Dealerships opened before then be allowed to remain open.

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But the would not be able to add stores in Akron or Dayton, which are all being considered for dealerships, Diarmuid O’Connell, Tesla’s president for business development.

reason we sell direct is not to the franchise dealer model,” said. “It’s because introducing a novel and innovative that requires a lot of customer and support.” He describes traditional dealers as “classic incumbent who would like to change law without debate.

Dealers are attempting to add the provision to Bill 137, which require motorists to move for a highway maintenance vehicle in the way they must for public emergency and road-safety vehicles. The passed the Senate unanimously in and it is scheduled for amendments and a possible committee vote this

Rep. Rex Damschroder, R-Fremont, the chairman, said he is not sure going to happen to the amendment. He has to both the auto dealers and representatives and does not think is a solution that would both sides.

“I it was in a stand-alone bill,” he said. is getting excited and rushing a That’s why they’re making an to put it in.”

Neil Clark, a lobbyist Tesla, sent House a letter last week them to block the amendment. kind of market suppression flies in the face of competition. he wrote.

Clark also that Tesla recently met JobsOhio, the state’s economic-development regarding the company’s plans to a pickup-truck manufacturing plant. told JobsOhio that was “under serious consideration” for the Clark wrote, and that the would eliminate the state contention.

A JobsOhio spokeswoman to comment.

Tesla has made statements in Texas. In April, CEO Musk told Automotive that Texas “would be a candidate for the truck plant” if eased franchise restrictions.


Asked about this, Chen said Ohio and both “offer a compelling as locations for the truck plant, but the will not bring manufacturing to a with a hostile regulatory

Damschroder said he still to see the final draft of the amendment, but he it a “fairness issue for all dealers in the of Ohio, which should be under the same game for equal competition.”

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