Ohio was the site of the latest battle in the war between Tesla and the auto dealers, and the subversives from Silicon Valley seem to have won the day.
The Ohio Dealers Association got an anti-Tesla amendment added to Ohio Senate Bill 137 – an unrelated bill that requires drivers to change lanes when highway maintenance vehicles are alongside the road. The proposed amendment would have banned Tesla (or, theoretically, other automakers) from selling cars directly to customers, and required it to make sales through independently-owned third parties.
The stakes are high for both sides. Groveport auto dealer Rhett Ricart told the Columbus Dispatch that he fears the long-established independent franchise model could unravel if states allow manufacturer-owned stores. “Tesla is Armageddon,” he said.
“If Tesla does it, then that sets the precedent for other automakers to do it,” agreed Ed Kim, an analyst at research firm AutoPacific.
However, Tesla VP Diarmuid O’Connell described traditional auto dealers as “classic incumbent monopolists,” and said, “The reason we sell direct is not to eviscerate the franchise dealer model. It’s because we’re introducing a novel and innovative technology that requires a lot of customer education and support.”
Tesla is steadily growing more skilled in the arts of war. A lobbyist representing the company sent Ohio House members a letter asking them to block the amendment. Tesla also issued a press release in which it urged its supporters to contact lawmakers, and pointed out that there are more than 250 Roadster and Model S owners in Ohio, that Ohio companies supplied over $10 million in Model S parts and components this year, and that the company already operates a service center in Dublin, and plans to open stores in Columbus and Cincinnati this month, as well as a number of Superchargers before the end of the year.
Finally, the electric automaker deployed its most potent weapon. The Columbus Dispatch showed photographs of members of the Ohio legislature taking test drives in an 85 kWh Performance Model S.
The amendment was defeated.