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Tesla Motors Inc Defends Its Business Model In Ohio

Tesla Motors Inc (NASDAQ:TSLA) is battling a renewed effort in Ohio to ban its business model, which sells cars directly to customers through branded outlets instead of selling to independent dealers. It’s already against the law in Ohio and many other states for manufacturers to directly compete with independent dealers who sell the same models, but since no one else is selling their cars, Tesla Motors Inc (NASDAQ:TSLA) isn’t affected by this regulation, reports Dan Gearino for The Columbus Dispatch.

Tesla Motors TSLA
Auto manufacturers can’t compete with independent retailers

“The dealers are trying to take a regulatory framework which was set up to protect dealers from (predatory action) from their manufacturers, and are trying to create a de facto monopoly,” said Tesla VP of business development Diarmuid O’Connell.

It’s hard to see how competition among independent dealers amounts to a monopoly, but the bill does seem protectionist. The Ohio Automobile Dealers Association says they aren’t specifically concerned about Tesla, which had just over 100 sales in Ohio last year, but about the precedent that it sets. If existing legislation can be bypassed by simply not selling to any independent dealers, big car manufacturers like Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) might decide that it makes more sense to do everything themselves.
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