Tesla Motors Inc (NASDAQ:TSLA) has been battling car dealers in Ohio for quite some time, and the battle continues. The automaker did score a legislative victory about two months ago, but now it faces another legislative hurdle. Sen. Tom Patton, who spearheaded the last attempt to ban Tesla’s direct to consumer sales model, is leading the push for this new piece of legislation as well.
Tesla battles auto dealer lobbyists
According to Jalopnik, Patton has a vested interest in keeping Tesla Motors Inc (NASDAQ:TSLA) from selling vehicles directly to consumers in his state. He’s apparently received some hefty campaign contributions from auto dealers.
There's a gold rush coming as electric vehicle manufacturers fight for market share, proclaimed David Einhorn at this year's 2021 Sohn Investment Conference. Check out our coverage of the 2021 Sohn Investment Conference here. Q1 2021 hedge fund letters, conferences and more SORRY! This content is exclusively for paying members. SIGN UP HERE If you Read More
Auto dealers are extremely afraid that Tesla Motors Inc (NASDAQ:TSLA)’s practice of selling vehicles directly to consumers will catch on, resulting in other dealers following suit. However, Jalopnik notes that both direct to consumer and auto dealership sales coexist peacefully side by side in other countries, including Germany and Canada.
Anti-Tesla lawmaker gets paid by dealerships
Jalopnik examined records from the Ohio Secretary of State and found that the Ohio Automobile Dealers Association Investment Group has given Friends of Tom Patton $7,550 since 2009. The site notes that the maximum amount the dealer’s association can give to lawmakers is $12,000 in Ohio and that this amount has been spread through three election cycles.
In addition, the site reports that individual owners of auto dealerships have given him even more money. After examining MediaTrackers, Jalopnik found that Patton has received “at least $42,825 from both state and national auto dealership owners, employees and political action committees.
Tesla battles in Texas too
Tesla Motors Inc (NASDAQ:TSLA) has faced a similar uphill battle in Texas regarding its direct to consumer sales model. Unfortunately, the automaker’s ultimate fate in Texas wasn’t so good, even after CEO Elon Musk tried to play the other side of the game by making his own campaign contributions. The amount he gave paled into comparison to what the rest of the massive auto sales industry was able to give as they teamed up against Tesla.