Ohio Senate Backs Tesla's (TSLA) Direct-Sales Proposal

Tesla Motors (Nasdaq: TSLA) is on watch following positive legislation passed in Ohio Wednesday.

According to the Columbus Dispatch, the Ohio Senate voted 32-0 to allow Tesla to run three stores running in the state. Senate Bill 260 will now head to the House where approval is expected due to a recent agreement between the company and the Ohio Auto Dealers Association.

In addition to Tesla's Easton and Cincinnati locations, the company will also be able to open a store in Columbus.

Ohio Sen. Tom Patton, R-Strongsville, commented that the bill restore the trust of all parties who expect there to be a level playing field ... It was never the intent of this bill to shut down any company’s business in Ohio.

Of course, legislatures keep defending the dealership model, citing it as better for the consumer. Senate President Keith Faber, R-Celina, said, We have franchise law in this state for a reason, to make sure we balance, usually, consumer protection with various interests ... Who is going to service the warranties? Who is going to service the vehicles? Who is going to make sure they’re complying with other states’ sales laws?

We don't know. Independent auto mechanics contracted by manufacturers that are still able to give a fair price on day-to-day repairs and maintenance, maybe?

Shares of Tesla are up in early trading.

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