Tesla Motors is a California maker of high-end electric vehicles that operates two retail showrooms in Ohio. That may soon change if the powerful auto dealer lobby gets its way. Three states – Arizona, Texas and New Jersey – already prohibit Tesla dealerships from operating. All three boast Republican Governors. Just this week, Chris Christie played an active role in shutting down Tesla in New Jersey, at the urging of the state’s entrenched auto dealer lobby.
Ohio may be the next state to say no to Tesla’s retail outlets, but the proposal must first gain the approval of our own republican Governor, John Kasich.
At issue is an Ohio rule that requires auto dealers to have a contract with a car manufacturer in order to be issued a license. The scheme is set up to protect auto dealers from direct competition by the manufacturers of the cars they sell. But Tesla sells direct at its own stores, not through independent dealers. In fact, Tesla’s Ohio locations were licensed by the state – a move that was the subject of a failed lawsuit by rival auto dealers.
Now the auto makers are asking the legislature for help. In December, a House committee considered an amendment to an unrelated bill that would have blocked Tesla. Committee chair Rex Damschroder said the idea hadn’t been fully vetted, but promised the issue would return in 2014.
Indeed, two weeks later, State Senator Tom Patton introduced SB 260 to ban vehicle manufacturers or their affiliated entities from selling cars in Ohio. Proponents argue it is necessary to prevent other manufacturers from competing directly with franchisees, but that is a red herring – doing so is already prohibited by law.
Why would legislators rewrite Ohio’s laws to prohibit the disruption of an entrenched industry business model? The answer may be as who is funding their campaigns. Bill sponsor, Tom Patton, has taken in nearly $43,000 in contributions from auto dealers since 2002. The Ohio Auto Dealers PAC has given $286,630 to candidates in Ohio since 2009, and auto dealers themselves contributed more than $100,000 to lawmakers last year.
But the apparent King of Fundraising from the auto dealers is Governor Kasich himself. According to data from the Ohio Secretary of State, the Kasich-Taylor campaign has raked in $203,913 in contributions from auto dealers (individuals and the PAC) since 2009.
If Ohio legislators do the bidding of the auto dealers in enacting the Tesla-killing legislation, Kasich will have to make a choice: support an innovative American manufacturing company that wants to do business in Ohio, or follow in the footsteps of Chris Christie, Jan Brewer and Rick Perry by killing a pesky rival to an entrenched lobbying group that’s given so generously to his campaigns.