Tesla Reaches ‘Good Compromise’ in Ohio, Hopes For Third Store

Tesla’s ongoing battle for the right to sell its revolutionary electric cars direct to customers was given a little boost yesterday with the news that the Ohio Senate Finance Committee has advanced an amendment to Ohio Senate Bill SB260 granting Tesla approval to open and operate a third Tesla Store in the state.

Sen. Patton (R-Strongsville) submitted the initial draft of Ohio Senate Bill SB260.

Sen. Patton (R-Strongsville) submitted the initial draft of Ohio Senate Bill SB260.

The amendment to Senate Bill SB260, a pro-dealer bill designed to stop Tesla Motors [NASDAQ:TSLA]– and any other automaker — from selling cars direct to customers, will now be passed to the Senate for an official vote.

Originally introduced to the Ohio Senate earlier this year by Republican Ohio Senator Tom Patton, SB260 sought to prevent the Californian automaker from opening any additional mall-based ‘Tesla Stores,’ in the state, essentially curtailing Tesla’s store expansion and business model in the state.

Sen. Patton, who has received more than $42,825 from state and national auto dealership owners, employees and Political Action Committees (PACs) between 2002 and 2013, said SB260 was designed to “protect the businesses, the Ohio businesses, that have spent money building up their dealerships,” but was not directly an “anti-Tesla bill.”

Read how Sen. Patton’s original Anti-Tesla Amendment failed.

Yet the Ohio Automobile Dealers Association which backed SB260 and General Motors recently provided testimony to the Senate Finance Committee which said that Tesla was in violation of existing franchise law and should be prohibited from selling direct to customers.

In its original form, SB260 would have allowed Tesla to continue selling cars to customers from its existing stores for as long as the automakers’ existing dealer licenses remained valid. Under the amendment advanced by the Ohio Senate Finance Committee however, Tesla would be given the chance to apply for a third store and service centre should the bill pass.

Tesla says the amended bill is a 'good compromise'

Tesla says the amended bill is a ‘good compromise’

Calling the amendment a ‘good compromise’ for both auto dealers and Tesla, Diarmuid O’Connell, Tesla’s vice president of business development told Cleaveland.com that Tesla wants to do everything it can to help Ohians go electric.

Related: Read our exclusive interview with the NJ Assemblyman who wants to save Tesla

“We want Ohio to be part of that revolution,” he said. “So, the ability to continue to grow here incrementally is a good thing.”

As the amended version of SB260 stands, Tesla will be able to operate up to three stores and service centres within Ohio, provided the Californian automaker is not sold or acquired, or starts producing vehicles that are powered by anything other than 100 percent electricity.

Sen. Patton, who maintains SB260 is needed to protect more than 60,000 jobs in the auto dealer industry, said if passed, the amended bill will be something he watches carefully.

“If it turns out this is a good business model for the consumers, we can revisit it,” he conceded.

For Tesla Motors, its customers and its fans, the ongoing nationwide battle against powerful auto-dealer associations is far from over. Nor has SB260 been officially passed yet. But in this ongoing war, we think Tesla fans will want to stop and enjoy this victory for a little while.


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