While most car manufacturers can’t sell directly to customers in Ohio, Tesla‘s gained a special exception through a 2014 law that lets the company operate three dealerships in the state.
Ohio’s laws normally block car manufacturers from getting dealer licenses. The state requires cars to be sold through independent dealerships. But Senate Bill 260, passed in 2014, created an exception for all-electric vehicle manufacturers who were already operating before January 1, 2014. Tesla was the only company that qualified.
The exception came after months of negotiations. In December 2013, the Ohio Automobile Dealers Association tried to add language to a draft bill that would’ve stopped Tesla from opening its first Ohio store. The amendment was dropped just one day later. Auto dealers then sued the state to cancel Tesla’s license, but the lawsuit was dismissed within two months. By March 2014, Tesla and the dealers association reached an agreement limiting Tesla to three stores statewide.
Today, Tesla runs its three Ohio dealerships under this grandfathered status. The company can service vehicles, provide loaner cars, and deliver new vehicles to customers. No other manufacturer can use this same exception because they weren’t operating in Ohio before the cutoff date.
This creates problems for newer electric vehicle companies. Rivian operates three service centers in Cleveland, Groveport, and Sharonville, but can’t sell cars there. Ohio customers who want to buy a Rivian must complete their purchase in another state, then have the vehicle delivered to Ohio.
Rivian’s filed a federal complaint challenging Ohio’s dealer license denials. The company calls the sales ban “irrational in the extreme” and says it doesn’t serve any legitimate public interest. The lawsuit, filed in the Southern District of Ohio on August 4, 2025, argues the prohibition reduces electric vehicle competition in the state.
Ohio isn’t alone in these restrictions. Mississippi passed a law in 2023 banning direct EV sales while protecting Tesla’s existing Brandon location. Illinois lets Tesla operate up to 13 stores through a 2019 agreement. Kentucky gave Tesla one license for Louisville in 2024 despite its general ban. States like Texas and Louisiana maintain complete bans on direct-to-consumer auto sales, forcing Tesla buyers there to complete purchases as out-of-state transactions.
Federal agencies have weighed in against these restrictions. The Department of Justice says direct sales bans likely increase costs and hurt consumers. The Federal Trade Commission wants states to reconsider these limitations.