Buckeye battle continues as Ohio car dealers sue to shut down Tesla dealership

Tesla Model S

Just a couple of weeks after car dealer groups failed to get the Ohio legislature to outlaw Tesla’s practice of selling cars directly to consumers, several dealers have filed a lawsuit in Franklin County that alleges violations of Ohio law and seeks to revoke Tesla’s license to sell new cars.

In the suit, the dealers say that state agencies improperly approved Tesla’s dealer license, because the company did not provide a copy of its contract with the manufacturer. In fact, it would be impossible for Tesla to do so, because the manufacturer and the retailer are the same company, and the law requires such an agreement to be between “two separate contracting parties,” according to Sara Bruce, VP of Legal Affairs for the Ohio Automobile Dealers Association. “If a license is not granted with proper authority, then that license should be rescinded,” she said.

Earlier this month, Tesla opened a store in Easton, its first retail outlet in Ohio.

Tesla VP James Chen said that the dealers’ argument twists the intent of the law and is almost completely based on procedural issues. “This is the same kind of bullying from the dealers we’ve faced in other states. The dealers, when they’re defeated in the court of public opinion, in the media and in the legislature, they then go to the courts.”

As John O’Dell of Edmunds.com told the Columbus Dispatch, the real issue in this nationwide war is the fear that other automakers will follow in Tesla’s footsteps. “Dealers have a lot of clout,” O’Dell said. “They have a loud voice and are huge income generators in most states.”       

 

Source: Columbus Dispatch via Green Car Reports