Ohio dealers fight Tesla; bill allowing direct sales moves in Ariz.

Ohio dealers fight Tesla; bill allowing direct sales moves in Ariz.

WANADAs NADA representative, Tammara Darvish of Darcars, Silver Spring, Md., offered the dealers view in an interview with Reuters: How can we as auto dealers compete with manufacturers in the same market when we are completely dependent upon them for our inventories?

In Fort Scott, Kans., dealer David Shepherd of Shepherd Team Auto Plaza told Reuters, There are rules in place, and theyre working. His message: If it aint broke, why fix it?

In Arizona, a state Senate committee passed a bill that would allow Tesla to sell directly to consumers in the state. There, not just dealers but also the Alliance of Automobile Manufacturers oppose the bill.

Mike Gardner, a lobbyist for the Alliance, told the Arizonia Senate committee, What were opposed to is allowing one of our competitors to go around the dealer network and sell directly to consumers, reports USA Today. We think we should all be treated the same.

Teslas Musk has said he does not want to upend the franchise system. But he doesnt think dealers can do a good job selling electric cars when most of their profit comes from selling and servicing conventionally powered vehicles. He sees EV sales as a conflict of interest for them.

In a recent blog post on the company website, Musk acknowledges dealers investment in their businesses. Franchiseesinvested a lot of their money and time in building up the dealerships. Thats a fair deal, and it should not be broken, he writes.

As predicted, Tesla Motors CEO Elon Musk has far from given up his fight for direct sales in various states. The battle has recently moved to legislatures in Ohio and Arizona. In the meantime, Tesla is dangling the promise of a $5 billion battery production plant, that could employ up to 6,500 people, to be located in a Sunbelt state. Arizona, Nevada, New Mexico and Texas are competing to host the factory. Texas has banned Teslas direct sales model, Arizona is considering allowing it. As for the other two, who knows?

In Ohio, the Bureau of Motor Vehicles has issued a license to Tesla allowing it to open direct-sales stores in Cincinnati and Columbus. Joe Cannon, a lobbyist for the Ohio Automobile Dealers Association, told legislators the decision means the states franchise rules have been thrown upside down, reports the Associated Press.

OADA is now pushing for a bill that would prevent Tesla from expanding direct sales beyond the two stores it already has in the state. Cannon told lawmakers, The distinctly different roles of dealers and manufacturers act as a system of checks and balances to ensure that warranty and other service issues are administered fairly, according to AP.

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