LORDSTOWN, Ohio (WKBN) – Lordstown Motors is moving closer to selling its all-electric pickup truck, but there’s a lot of red tape involving car franchise laws before it gets there.
The company’s owner was in Columbus this morning, along with state Senator Michael Rulli and state Representative Mike Loychik, to discuss individual sales of the Endurance truck.
“It’s simple. EV sales are not like traditional sales,” Rulli said.
Lordstown Motors talked about how fleet sales are different than traditional car sales off a dealership lot. They said potential buyers are only interested in the total cost of the vehicle since they’re buying them in batches.
They said potential buyers aren’t interested in anything else since they likely have their own mechanics.
“The whole economic model of total cost of ownership is how fleets buy, and that’s kind of how we’re driving our business model,” said Tom Canepa, General Counsel and Corporate Secretary for Lordstown Motors.
LMC feels that economic model is driving the business model to sell directly to the customer.
Ohio uses the franchise system. No auto manufacturers are allowed to get a dealer’s license. Tesla got one prior to making cars and was allowed to keep it. Dealers believe consumers benefit from price competition and with other help they provide.
“Especially on service and warranty issues, the dealer becomes the consumer advocate,” said Zach Doran, a spokesperson for the Ohio Automobile Dealers Association.
The Takata airbag situation is one of the issues recently that dealers share when explaining the difference. This new carve out in Ohio law would only be for Lordstown Motors.
“Specifically this piece of legislation is designated just for Lordstown Motors. The genesis behind it is Ohio built, Ohio endurance. They are the company that’s making EV’s in Ohio and that’s what this piece of legislation is intended for Lordstown Motors,” Rulli said.
The Ohio Automobile Dealers Association disagrees with the go-to market strategy that Lordstown is employing but is excited about development in the Mahoning Valley.
“We want to see that company thrive much the way that Honda, Chrysler and Ford and General Motors all do in Ohio with franchised dealers,” Doran said.
The legislation could start its drive through the Ohio Statehouse next week.
At least 20 states allow EV manufacturers to sell directly to consumers but over half of America does not.