Tesla's business model appears safe in Ohio -- for now.
The state's House Transportation, Public Safety and Homeland Security Committee didn't vote on a licensing amendment Tuesday that Tesla Motors Inc. says would prevent it from selling vehicles in Ohio.
The amendment, supported by the Ohio Automobile Dealers Association, prohibits a "manufacturer or a subsidiary, parent, or affiliated entity of a manufacturer" from getting a license as a motor vehicle dealer in the state.
The amendment would have been attached to Senate Bill 137, which requires drivers to move over when approaching a road-maintenance vehicle, according to the Columbus Dispatch.
Committee Chairman Rex Damschroder, R-Fremont, Ohio, said the bill wasn’t the right place for the licensing amendment. He said the Ohio legislature may take up the issue in January and have “thorough, vetted hearings with all of the parties involved to see if there’s a solution.”
“A quick amendment stuck into another bill that’s ready to move out of committee, sometimes that comes back to bite us if the amendment isn’t properly vetted and all parties aren’t heard. At this point, I don’t think we’ve had quite the dialogue with the auto dealers, the auto industry and even with Tesla,” Damschroder said. “It’s my decision as chairman not to throw it in as an amendment at the last minute and let everybody try to figure out what it does later. ”
Ohio dealers plan to continue to defend the state's licensing and franchise system.
"We will be interested in trying to present legislation that will protect the integrity of Ohio's licensing law," Tim Doran, president of the state's dealers association, said in an interview Wednesday. "I think the legislature is interested in seeing a bill that is fully discussed and debated."
Tesla, which has a service center in Columbus, Ohio, plans to open stores this month in Columbus and Cincinnati. The automaker says it will employ 26 people in Ohio with the expansions and "add an initial $7 million in direct economic activity."
Tesla wrote in an e-mail to supporters that Ohio companies have supplied more than $10 million in "parts and components" to the Tesla Model S in 2013, with Tesla expecting that figure to double by this time next year.
The company also said it plans to install several Superchargers in the state by year end. There are more than 250 Tesla Roadster and Model S owners in Ohio.
"We thank our supporters in Ohio and we look forward to continuing to do business in the state," Diarmuid O'Connell, Tesla's vice president of business development, said in a statement after Tuesday's development.
A spokesman for committee Chairman Rex Damschroder said Wednesday the amendment was never offered, so there was no vote on it. S.B. 137 had already passed the Senate without the amendment.
Now that the transportation panel has approved, a full House vote on the bill could come as early as next week.
O'Connell told Automotive News in September that dealerships around the country "object to the fact that we're trying to educate our consumers directly, sell them cars directly and service their vehicles directly because this runs entirely counter to the virtual monopoly they have in most states."
