6. Ohio Moves to Block Tesla’s Direct Sales Model – Again


Speed Read:

Ohio law­mak­ers are mak­ing a fresh attempt to out­law Tes­la Motors’ retail mod­el — com­pa­ny-owned deal­er­ships — after an unsuc­cess­ful try in Decem­ber.

The pro­pos­al, Sen­ate Bill 260, was intro­duced at the request of the Ohio Auto­mo­bile Deal­ers Asso­ci­a­tion, whose mem­bers see Tes­la as a threat to a sys­tem in which near­ly all deal­er­ships are inde­pen­dent­ly owned fran­chis­es.

Drill-Down Details:

  • Tesla’s direct sales mod­el means the price is the same for every buy­er and cus­tomers don’t need to shop around for the best deal.
  • Ohio Auto­mo­bile Deal­ers Asso­ci­a­tion argues that inde­pen­dent deal­ers make more invest­ment in show­rooms and employ more than 50,000 peo­ple, work­ing as con­sumer advo­cates with com­pet­i­tive pric­ing and on-site vehi­cle ser­vic­ing.
  • Deal­ers claim Tes­la can gain an unfair advan­tage through direct sales.
  • The Palo Alto-based start­up has two show­rooms in Ohio, though plans to adds a third have been stalled by the oppo­si­tion.
  • Tes­la only sold approx­i­mate­ly 300 cars in Ohio last year.
  • In near­ly every state, laws say that an automak­er can­not com­pete at the retail lev­el with its inde­pen­dent deal­ers.
  • Tes­la is exempt from many of those laws because the com­pa­ny has no inde­pen­dent deal­ers.



1 Comment

  • melissa brittany says:

    Tes­la Motor Inc.’s (TSLA) can sell mod­el direct­ly sup­port­ed by three staff mem­bers from the Fed­er­al Trade Com­mis­sion (FTC), name­ly Andy Gav­il, Deb­o­rah Fein­stein, and Mar­tin Gaynor.

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