Published on March 29th, 2014 | by Christopher DeMorro


GM Wants To Ban Direct Tesla Sales In Ohio

March 29th, 2014 by  

Originally published on Gas2.


In the battle between Tesla Motors and entrenched car dealers, reinforcements have arrived for the status quo in the form of General Motors. With the recent setback in New Jersey, the battlefield has shifted to Ohio, where another proposed ban on direct car sales awaits authorization.

According to Automotive News, GM’s Selim Bingol, VP of global communication sent a letter to Ohio governor John Kasich urging him not to allow Tesla to operate under “a completely different set of rules.” Ohio has become a place of contention after an underhanded effort to ban Tesla sales failed at the last minute, just like the successful New Jersey ban that snuck through at the last minute.

Meanwhile, though, states like Texas and Arizona are changing their tune in regards to direct sales, as Musk’s proposed battery Gigafactory could bring thousands of jobs and millions in tax revenues to the sunny states. Most major automakers have remained quietly on the sidelines though as the Tesla saga unfolds, and GM ‘s letter is one of the first public statements on the matter.

If you need any further convincing that the dealership model only benefits car dealers and makers, well, here’s your sign.

Source: Automotive News

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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.

  • Burnerjack

    While I agree that any and all players need to ‘play by the same rules’, “If you can’t beat ’em, ban ’em.” cannot be allowed to stand. This is not the 19th century.

    • KentS

      Other than the libelous headline to this story, tell us where GM asked for a ‘ban’?

      Amazing how deep the hate for GM runs in the green world, and the green media simply perpetuates it with this crap.

  • Albertico

    GM does not care who they sell their cars to, dealers or consumers, because either way they get paid. Tesla as the new kid in the block and selling a product that being full electric gives no financial incentive to sell for Car Dealerships is at a serious disadvantage if forced to go through dealers. They would have to invest more money to establish their own dealers and if trying to sell through privately owned dealers, car salesmen (middlemen) will try whatever they can to prevent them from doing so.

    GM has become truly pathetic as a company, even more so with their recent embarrassing 4 million plus vehicles recall due to deaths caused by their cars. On the other hand Tesla just made their vehicles even safer. They cannot compete with Tesla so they are trying to keep Tesla from competing at all.

    I’m amazed they ever made a car as decent as the Volt

    • A Real Libertarian

      “I’m amazed they ever made a car as decent as the Volt”

      Bob Lutz isn’t there anymore

      So from now on it’s going to be the likes of the Spark coming out of GM.

  • Good Luck Tesla is the new way and you will not be aale to stop a great car and a marketing plan thats time has come

  • Alan Jones

    So screw the American way GM? If you can’t compete build one of your own and sell it! We the people bailed you hot shots out and now you have a little competition and you run like a little girl to your Republican buddies! If you can’t cook stay out of the kitchen!

  • Gabriel Seneca

    Tesla Motors doesn’t want non-employees working on, and evaluating, their one and only car. The design flawed Model S.

    Perhaps if mechanics untethered from Elon Musk’s mind control, could have warned consumers about the inadequacy of the Model S battery cell shield.

    Dealerships work, Directorships control.

    • I hope you are getting paid to write this propaganda, otherwise it’s just sad. Should I pray for you wayward soul?

    • Bob_Wallace

      Don’t tin foil hats make your head all sweaty?

  • Camisade

    Disgusting. Nothing like waking up in the morning as a GM Exec and making a decision to be on the wrong side of history simply because competition has become scary. Clearly, I’ve bought my last GM car.

  • TimothyBPhier

    I think it’s a major tactical blunder on their part as it’s shining a spotlight on their comfortable arrangement that they’ve been quietly sitting on for years. If things continue as they are they are merely hastening their own demise by drawing so much attention to the matter.

  • cmdred

    Don’t forget, it was Andrew Card, former presidient of the American Auto Dealers Association who, as George Bush’s chief of staff, organized a lawsuit with GM, Exxon, and Texaco to force California to repeal its law requiring the production of zero emission (electric) cars in 2002. After that, GM sold the patents for its Nickel-Metal hydride batteries to Chevron (!) who promptly disallowed the production of them for use in battery EV’s, and then GM and other manufacturers recalled all their electric cars and crushed them. Toyota was the only company to not recall its EV’s, after a big protest, and the RAV4EV was the only BEV on the road for several years.
    It wasn’t until Li-ion batteries became feasible that electric vehicles went in to production again.
    Sound like a wild conspiracy??? IT REALLY HAPPENED THIS WAY!

    • StefanoR99

      It’s unbelievable what they did. Was thinking the other day those f!kers put us behind 10 years. Tha’ts 10 years worth of money flowing out of this country to places who would like to see the West on it’s knees.

  • Lizard

    Hey, GM! Nobody wants your old, tired gas combustion clown cars.

    • Steve Grinwis

      … Other than the ELR, The Volt, the Spark EV… ? Just as many PHEV’s as pretty much any other manufacturer, really?

      Don’t forget things like the Cruze Eco that hits, what… 40 MPG? Better? It’s the car that made Honda scramble to keep up fuel economy wise in the subcompact segment after all…. And still has better fuel economy than the Civic i’ll add… (Cruze Eco, vs any current model Honda Civic)

      Might want to check your preconceptions from the 80’s at the door.

      • StefanoR99

        Both the ELR and Volt have ICE engines that will keep dealers busy at some point. I think if anyone’s got 80s preconceptions it’s the management at GM trying to maintain the status quo.

        • Steve Grinwis

          ICE’s that are rarely used, rarely break.

          GM didn’t spend a billion developing the worlds best series hybrid system because they wanted to continue with the status qua, IMHO.

          That GM is doing this is very disappointing, but in all honesty, I think they’re setting up to launch a TESLA competitor brand with direct to consumer sales, and they want to be able to operate under the same rules as TESLA.

          Hence all the ‘Same rules for everybody’ thing.

          • StefanoR99

            ICE engines have to be used otherwise they break – I believe the volt’s engine will turn over from time to time whether you want it to or not in an attempt to keep it alive.

            In the end GM can’t be trusted. Too many vested interests, too many jobs lost if a car that doesn’t break, doesn’t need servicing and has only a fraction of the parts becomes mainstream.

          • Bob_Wallace

            The issue is not whether GM can be trusted. GM and every other car company are (my guess) going to be forced to move to EVs.

            Tesla, Nissan and BYD along with possibly some other companies are going to make that happen.

            Give people an option that costs 1/3rd as much per mile to drive and is a more convenient, more enjoyable car to drive and then the market for ICE vehicles will simply dry up.

            At some point dealerships will no longer make money off servicing and will close their repair bays. Dealerships may well morph into “Tesla showrooms” for other brands.

          • jeffhre

            Irrelevant, though well stated. Perhaps should be written as, every consumer is (my guess) going to be motivated to move to EVs.

            Because there is a chance that could be like saying – Kodak will eventually be forced to move to digital photography.

          • Bob_Wallace

            I don’t dismiss the possibility that some companies will emulate Kodak and move too late.

            The side of the road is littered with the bones of large companies that didn’t see the curve in time….

          • jeffhre

            Seriously? Once every six months for 60 seconds to slosh around the fluids? Inconsequential even for an engine from the 1960’s, which needed far more maintenance, and used regular gas, and non synthetic oil!

          • jeffhre

            $750 million. And my Volt won’t make a dealer rich while I own it! When it’s off lease, I may get on a waiting list for a Tesla Gen III.

      • disciple07

        when we talk about MPG on cars, the technology has been out there for decades to have a full size car do 50- 60 mpg. they have had test carburetors accidentally slip out in the trade, and have done whatever they could to buy back those cars so no one will notice.

        I mean even the VW Jetta does not get the mpg as it did in the 1980’s or 90’s. why is this, my opinion is that the oil companies have too much money on the table. When gov’ts say they want people to be energy efficient, they only want what is best for their own pockets.

        very sad that greed trumps living wisely.

        • Steve Grinwis

          Sounds like we need an automotive history lesson!

          First of all, there is no miracle carburetor that let full size cars do 60 MPG in the 80’s. That would require physically impossible engine efficiency. This is the reason why Toyota had to go to a hybrid, and make a super slippery aerodynamic car for the 2002 Prius to hit 41 MPG.

          For the snopes article on the infamous miracle carboretor, click here:

          Secondly, there are a number of very good reasons why cars today don’t get as “good” as fuel economy as they did years ago.

          1) Lean Burn — This is an ECU mode where the car uses more air and less gasoline. This raises combustion temperatures, and gives you better fuel economy. It also as a side effect produces lots of NOx, a key ingredient of smog, and a particularly nasty substance to breath. There is no way for a CAT to filter this out, since they’re oxidative, and these are substances that are already oxidized. The EPA has disallowed lean burn now, by virtue of limiting NOx emissions. This is a good thing.

          2) Cars now are heavy — A 1992 Geo Metro weighed 1680 lbs. A 2014 Honda Civic weighs 2711 lbs. So, there’s no way for a car to be 60% heavier and get ‘the same’ fuel economy’.

          3) Cars now are safer — Climb into that Geo Metro, and it’s pretty much a death trap compared to the Civic. That’s a big part of what makes cars heavier. You add in steel reinforced doors, 9 air bags, rollover protection, reinforced seats, abs, stability control, bigger brakes, stickier tires… and it all adds up to a lot of weight.

          4) Cars now… aren’t as bad as you think — In 2008, the fuel economy rating system changed to include higher speeds, the use of air conditioning, and colder outside temperatures… So you can’t compare the fuel economy number that you remember from the days of yore to the sticker on the window of a brand new car. Fuel economy is actually better by about 20% for a modern car at the same rating as the old system.

          Basically, there is no conspiracy to keep cars inefficient. Gasoline engines are a well understood, well engineered technology, that we’ve pretty much pushed to the max. The gasoline engine in a modern Prius pretty much represents the most efficient gasoline engine that CAN be built with current materials and not cost a fortune. They’re pretty much running out of rope. This is part of why the switch to electric cars is so important.

          • disciple07

            nice to know that you have done your history. haha, I know for a fact, because I used to have a 1973 3/4 ton truck that did better mileage than my brand new GM 1500 Sierra. that is sad, now tell me why technology has made things better.

          • Bob_Wallace

            1973 Ford F250 3/4 ton weighed 3505 pounds.

            The lightest weight 2015 Ford F250 weighs 5941 pounds.

            A truck that weighs 42% less should get better gas mileage.

          • Steve Grinwis

            Furthermore… It didn’t get better fuel economy… Not according to the stats anyway.

            A 1974 gets around 10 MPG. The latest trucks are getting around 16 MPG, despite the nearly doubling of weight. (I’ll be honest here, my Camaro weighs more than his old 3/4 Ton… I’ll refer you to my point about weight I made above)

            Link for latest:

            Link for 1974:

            One of three things is going on here: Your memory of the mileage you were getting is off (hey, it’s been nearly 50 years since 1970, and gas was $0.10 a gallon then, wasn’t it?), you aren’t driving under the same conditions, you aren’t driving with the same style. I’ll give you the benefit of the doubt and say that it’s the second two.

            You have to understand that when it comes to fuel economy, the first thing you should change on a vehicle is the nut behind the wheel.

          • Bob_Wallace

            Maybe things were better. I had a ’67 Spitfire that I hardly ever had to put any gas in.

            ‘Course it hardly ever ran….

          • disciple07

            regarding the nut behind the wheel, is very true. I was at that age when power was important. I just know that when I used to travel to Alberta, being a 14 hr drive, I averaged about 21-23 mpg at a speed of 65 mph. now, that said, GM approached me to buy my truck back and give me a ’74. my neighour had the basically identical truck besides color. His mpg was about the same as what is mentioned above. about 10-12 mpg.
            this had happened once before to my recollection with a 1868 Olds 88, 455 blueprint engine. and he had GM also contact him for over a year to get him to trade it in, but he refused.
            just stating facts is all. yes I agree price of gas was lower at that time, now that said, price does nothing to mileage. oh, and by the way, my memory is wonderful. and it has not been 50 years. only 41yrs, from when I purchased this truck. it was a year old, new off the lot. it had a 350 with a Rochester 4 barrel. great truck that we used on the farm, even had bias 10 ply tires. 1973 GMC 2500 Custom Deluxe. only thing that was poorly made was the body.

          • Steve Grinwis

            I call shens. Your full size 73 truck didn’t get 23 MPG, especially on the highway.

            Those old boats were about as aerodynamic as brick walls. A brand new truck has a coefficient of drag of around .4. Your old truck had a coefficient of drag that is was much, much worse, but… to make a nice assumption for the truck, we’ll say it’s as good as modern, wind tunnel tested trucks. This is as compared to the prius at 0.25. We shall, for the sake of our current argument, ignore the fact that you were running that old truck on crappy tires which are incredibly inefficient compared to modern day low rolling resistance radial like the Prius uses. Just to be generous.

            Prius frontal surface area: 2.1 sq m, pickup truck: 4.0 sq m

            So, we have double the surface area, and 60% higher coefficient of drag… so, overall, it requires about 3.2 times more power to push your pickup truck through the air compared to the Prius. It’s a valid assumption to assume all losses at speed are aerodynamic, since the we’ve already said we’re going to ignore that your truck had much worse rolling resistance compared to the Prius. This is a nice assumption that’s generous to the truck once again.

            For reference a modern Prius is rated at 48 MPG on the highway, so, for your truck to hit 24 MPG, the engine would have to be 160% as efficient as the Prius engine.

            Coefficient of Drag Reference:

            The maximum possible otto cycle engine efficiency is around 61% for an engine with 11:1 compression ratio. This is before any loss in friction in the engine, drivetrain loss… any of that.

            However, no one in their right mind was using that kind of a compression ratio back then with unleaded gas. You were looking at around 8:1 compression, the maximum efficiency of which is 56%

            Now, the actual thermal efficiency of a Prius is 38%, which is a marvel of modern engineering aided by the fact that the engine pretty much always runs at optimal load and rpm. For you truck to hit 24 MPG it would have to hit over 60.8% efficiency, which is equal to the theoretically possible value of a truck with an insanely high compression ratio.

            And this ignores the the frictional losses in the engine which are substantial and the fact that your engine from the 70’s isn’t made of magic, and can’t achieve magical levels of combustion efficiencies.

            This also ignores the fact that the Prius uses a modified Otto cycle called the Atkinson cycle to raise it’s efficiency even more, that your truck couldn’t have done, since it wasn’t a hybrid and had to have power. (Atkinson cycle engines trade off power density for efficiency)

            What you are suggesting is simply not physically possible. Provably.

            So… In short: You’re remembering incorrectly, or you are flat out lying.

            Your call.

          • disciple07

            haha, I am so glad that you know everything. I do hope you are wise enough to know that some things are beyond your mind’s knowledge. I will leave it at that cuz I know that no amount of information given to you will make a difference. thanks for the comments.

          • Steve Grinwis

            When you try and slip bullshit past an engineer, we generally notice.

          • jeffhre

            Weren’t MPGs calculated a little differently then?

          • Bob_Wallace

            “First of all, there is no miracle carburetor that let full size cars do 60 MPG in the 80’s. ”

            Why of course there were. There used to be ads for the plans for only $19.95 in the back of magazines.

            Right along side the ads for sea monkeys and devices that would let you see through women’s clothes….

          • disciple07

            sounds like you have this discussion as a joke. well, haha to you as well

          • A Real Libertarian

            Sea-Monkeys actually exist:


          • Bob_Wallace

            Not like the drawings in the ads…

          • A Real Libertarian

            But not like miracle carburetors either…

          • jeffhre

            That’s not a miracle carburetor – that’s an organic water purifier!

          • Burnerjack

            “…here’s your sign!…”

          • jeffhre

            I liked those sea monkeys. They were great. Not as great as my crystal radio and electrolysis kit, but still great!

          • Bob_Wallace

            I built a few crystal radios. We had a pissed off cat.

          • jeffhre

            LOL, We had a dog that would put up with just about anything. He sure did try to bite the neighbors youngest kid at every opportunity though. He must of figured out what ran downhill 🙂 (200 MPG carbs)

        • Burnerjack

          Oil companies would love 200 mpg cars. Sounds counter-intuitive, but what would happen is the price of fuel would go up proportionately. Same profits, less infrastructure and their very finite supply would be extended an equal amount. Not only all that, but then they could claim that the use of their product has no apreciable effect on the environment.

          • Bob_Wallace

            I don’t think that’s how the market works.

            If you look at the price of oil following the 2008 recession, oil use dropped and oil prices followed.

            Oil prices are determined by the most expensive to extract/refine that is needed to fulfill demand. Drop demand and the more expensive sources drop out.

          • Burnerjack

            Oil use dropped due to reduced economic activity.
            Oil price dropped because there was less money available.
            They have entire office buildings full of people who’s job it is to determine how much you have in your pocket. If they analyze to the low side, they suffer lost profits. Should they analyze to the high side, they risk “demand destruction”. People will car pool, buy EVs, etc. The former is more of a short term injury to the stockholders, while the latter is a long term, permanent reduction in market size. Should a company, dealer or commodity trader make a wrong move, they have no choice but take it on the chin. Supply/demand has some input but not like one would expect. As far as “dependent on cost”. This is the biggest lie in all of Capitalism. The only input cost has is this: “If the market fails to generate support for a product that ensures a healthy profit over cost, the product is withdrawn from the market. Period.

          • Bob_Wallace

            What I said.

          • Steve Grinwis

            Ya… I don’t think you understand how markets work…

            We’ve consistently seen that when there are supply shortages, there are price spikes, and when there are gluts, there are price drops.

            More or less: What Bob said.

            All the rest of that is a bunch of non-sense gobblyguck.

          • Burnerjack

            By your argument, the rules of supply/demand can and are manipulated. True. “Valuation is based on what the market will bear.” Absolute trump card.
            Notice whenever on a national or greater scale, oil prices drop. Prevention against Demand Destruction.

          • jeffhre

            It’s not all that complicated. Try to cajole OPEC into producing less when prices go down, and produce as much as possible before the party ends when prices go up. All the worlds skyscrapers full of analysts can’t do much about that.

          • jeffhre

            I also think oil companies could ultimately love 200 MPG carbs. It could mean that they could ultimately continue to dominate and control the worlds transport fuel markets, long after their current mid-level executives have retired. Or not.

  • jeffhre

    So this is what GM meant when they claimed they were forming an in-house unit to
    compete with Tesla…

  • tiktin

    It absolutely boggles the mind. Just think about this. Tesla needs permission from rival auto dealers to sell cars? But of course it is the politicians, the government which is responsible for this. The car dealers could do nothing to stop Tesla if the government were not using its power to do their bidding. It apparently never occurs to these politicians to think of their constituents instead of the special interests. They’re screwing you, folks, and if you have any sense you’ll throw them out in November.

    • jeffhre

      Absolutely, and at the local level, in November, you will have the opportunity to vote for new candidates who were pre-screened by the car dealers. And a few other illustrious members of the local chamber of commerce, and some few other successful members of the business community. Happy election day to you sir!

      • tiktin

        Oh, I don’t know. Are you saying all candidates are alike? You know, if enough people contacted their legislator and asked them to repeal the franchise laws, they would listen. After all, we outnumber the car dealers by about a thousand to one. The reason these special interest groups get away with it is that their lobbyists are prowling the corridors of the state capitols buttonholing legislators while the rest of us are asleep.

        • Bob_Wallace

          If we voted for a better country we’d get one.

        • jeffhre

          Every person is unique in all the world. We learned that in kindergarten.

  • RamboSTiTCH

    I am for a free market economy. But, couldn’t a car dealership buy several Tesla’s and resell them at a slightly higher price? It would work as long as supply remains tight and demand is high (rich people don’t like to wait in line).

    • StefanoR99

      I think the car dealers don’t want Tesla’s almost-zero-maintenance EVs period. They see the potential end of their business model in Tesla and are doing everything to fight it (at the expense of literally everyone else).

      I think it’s a major tactical blunder on their part as it’s shining a spotlight on their comfortable arrangement that they’ve been quietly sitting on for years. If things continue as they are they are merely hastening their own demise by drawing so much attention to the matter.

      They should have kept quiet and taken the money while they were able.

      • Jim Seko

        “If things continue as they are they are merely hastening their own demise by drawing so much attention to the matter.”

        I agree with you 100% so I hope they keep fighting so their demise will, indeed, be hastened. This would also result in more free publicity for Tesla. Keep it up auto dealers!

      • Steve Grinwis

        The Telsa S has a maintenance plan that costs $600 / year. That’s higher than the maintenance cost on a typical gas mobile, which comes in at $36 for a 2014 Chevy Cruze for the first year of ownership. (Presumably for an oil change). Costs eventually climb for the Cruze as it ages, but it takes quite a while for the costs to equal the $600 plan. And don’t forget the Tesla plan doesn’t include tires which are included in the Cruze Prices.

        See TCTO for the cruze here:

        Dealerships should be lining up in droves to sell this thing to be honest. They would make more money on it than your typical car.

        Honestly, what dealerships are worried about is that GM, Ford, et al will start selling direct to customers, like Tesla is. If GM can make a convincing argument that they MUST be allowed to do this in order to compete with Tesla, that obviously destroys dealership businesses, as they can simply undercut their existing dealership on prices.

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