First of all, my friend did NOT have a copy of the ordinance, he merely was aware of what the ordnance said.
Second, Steier said that Tesla was acting as a dealer. The law at no place says that offering test drives makes one a dealer. It does not even say that offering test drives is illegal. Just because Steier says that it is illegal does NOT mean that it is illegal. It may be that a judge will agree with Steier, but until that happens it is not accurate to say that Tesla was doing something illegal. As a a matter of fact, I read the two laws and do not see any place in them where test drives are mentioned.
You strike me as one of those people that believes that since the FCC is the Federal Communication Commission they have authority to regulate all forms of communication, even if Congress has passed no law giving them such authority. In this case, while the DOT has the authority to regulate automobile dealers, the law defines automobile dealers as those who offer automobiles for sale in the state. Tesla was not offering the cars for sale. They were merely offering test drives. The law does not specify that you must be a licensed dealer to offer test drives. The law specifies that you must be a licensed dealer in order to sell at retail automobiles.
Whether or not Tesla was doing something illegal is up to a judge to decide, NOT up to the head of the DOT. Especially not when the law so clearly does not state that it was illegal. The only thing which dealers do which the law states that automobile manufacturers are not allowed to do is sell cars at retail in Iowa.