Bad Weather Aside, Tesla Has a Storm of Its Own Brewing in Ohio


Tesla’s (NASDAQ:TSLA) fight with conventional auto dealers in Ohio is once again underway, as new language was introduced in Ohio’s legislature that seeks to more explicitly ban factory-owned stores in the state, a core portion of Tesla’s unique business model.

The Ohio Automobile Dealers Association, which is behind the legal push, asserts that that the state’s current laws in place should have prevented Tesla from getting the necessary licenses for its locations in Cincinnati and Columbus, Automotive News reports.

“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,” Sara Bruce, the association’s vice president of legal affairs, told Automotive News on Wednesday. “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.”

Tesla, naturally, argues that it is within compliance of Ohio’s existing state laws; a Tesla executive also contends that it properly applied for and received the licenses in question. ”We’re not out to eviscerate the dealer business model,” Diarmuid O’Connell told Automotive News. “We’re out there simply to introduce a new technology in the manner we think is most effective.”

Tesla Model S, photographed in Switzerland by James Lipman //

While the fight at the capital is playing out, members of the dealer association are weighing the decision to appeal a court’s decision that dismissed its charges against Tesla. A judge ruled earlier this month that that the plaintiffs lacked the standing to sue, Automotive News reports.

Joe Cannon, who is the vice president of government relations for the Ohio Automobile Dealers Association, said that the dealers were not trying to ban Tesla from selling vehicles in the state but that Tesla should have to abide by the same restrictions and regulations currently imposed on the dealers. Additionally, changes made wouldn’t be retroactive, so Tesla would keep its Columbus and Cincinnati locations, though its ability to continue to grow would be impeded — a big deal in a state like Ohio.

“Ohio is a great car market,” O’Connell said to Automotive News. “We’ve had a great reception there to date.”

Ohio is one of many states that has posed a threat to Tesla’s business model, and Tesla CEO Elon Musk has said in the past that he would consider pursuing legal action on a national level, either through federal legislation or a federal lawsuit, according to Automotive News.

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