By Dan Gearino
A trade group for Ohio car dealers is asking a Franklin County court to rescind Tesla Motors’ license to sell new cars, citing what they say are violations of Ohio law.
The plaintiffs in the case also include several central Ohio dealer groups, such as Midwestern Auto Group of Dublin, Ricart Automotive of Groveport and several of the Germain family dealerships.
“If a license is not granted with proper authority, then that license should be rescinded,” said Sara Bruce, vice president of legal affairs for the Ohio Automobile Dealers Association.
The defendants are the Ohio Department of Public Safety, the Ohio Bureau of Motor Vehicles and Tesla.
In the suit, which was filed in Franklin County Common Pleas Court, the dealers say that the state agencies improperly approved Tesla’s dealer license earlier this year because the company did not provide a copy of its contract with the manufacturer of the vehicles to be sold.
In this case, the manufacturer and the retailer are the same company, but the dealers say that the law still calls for proper documentation.
Even if Tesla had provided a contract, it would not have been valid because the law requires such an agreement to be between “two separate contracting parties,” Bruce said.
Tesla did not immediately reply to a request for comment.
Earlier this month, Tesla opened a store at Easton, the automaker’s first retail outlet in Ohio.
Also this month, the auto dealers association made an unsuccessful attempt to get the Ohio General Assembly to outlaw Tesla’s business model.
The lawsuit is the next step in the dealers’ attempt to stop Tesla from gaining a foothold in the state.
Unlike most auto brands, Tesla sells its all-electric cars directly to consumers through company-owned stores.
This is different from the way established auto brands sell their products. Companies such as Ford, General Motors and Honda sell through a network of independently owned dealers.
Established dealers have raised concerns that Tesla’s model is opening the door for other automakers to open company-owned stores, which they say would undermine the concept of an independent dealer network.
The dealers say they are trying to preserve a system that employs 50,000 Ohioans, while Tesla says the dealers are monopolists who are wary of real competition.
Tesla has faced similar legislative and legal battles in other states.