Texas lawmakers won't approve Tesla dealerships

[Slick Vik]

Texas dealerships can breathe a sigh of relief after lawmakers rejected a proposed law that would have allowed Tesla to open dealerships across the state.

 

The luxury electric carmaker was pushing lawmakers to reverse a state law that forbids manufacturers from directly selling to consumers. The bill did not get approval during the recent legislative session.

House Bill 3351 would have allowed car manufacturers to sell up to 5,000 vehicles per year at the manufacturer's dealership. According to StateImpact Texas, Tesla CEO Elon Musk believes the company could sell 1,500 to 2,000 vehicles a year in Texas.

 

Musk has been adamant that the luxury brand needs to be directly available to consumers and not be forced into a franchise system.

 

"We'd be at the back of the bus," he testified at a hearing earlier this year. "It's a matter of life or death."

 

Tesla owns two showrooms in the state that aim to introduce consumers to their models, but they stop short of selling vehicles. StateImpact points out that you can't drive one or find out how much one of the vehicle costs at those locations, which are located in malls.

 

Tesla has been aggressive in trying to get similar legislation passed in other states. The company won court decisions in Massachusetts and New York and got legislation passed in Minnesota, according to

 

But it hasn't been as lucky in states like Virginia or Texas.

 

The Texas Automobile Dealers Association, which opposed the legislation, told CNN that lawmakers made the right decision by not allowing the direct selling.

 

"Franchise laws give dealers the opportunity to have a much wider presence in the country, and they give consumers a better opportunity for purchase and service of their vehicles," Bill Wolters, president of the

Texas Automobile Dealers Association, told CNN.

 

http://www.chron.com/cars/article/Texas-lawmakers-won-t-approve-Tesla-dealerships-4579344.php?cmpid=hpfsln

 

[Ross]

What's your point? The legislature listened to the anti-competitive pleas of the large donors in the auto dealers world and maintained barriers to entry for new participants. This happens in nearly every sector of the economy.

[infinite_jim]

http://www.teslamotorsclub.com/showthread.php/11205-Texas-registration-issues-and-steps-to-navigate-them

[Slick Vik]

What's your point? The legislature listened to the anti-competitive pleas of the large donors in the auto dealers world and maintained barriers to entry for new participants. This happens in nearly every sector of the economy.

 

Mr. Status Quo

[kylejack]

What's your point? The legislature listened to the anti-competitive pleas of the large donors in the auto dealers world and maintained barriers to entry for new participants. This happens in nearly every sector of the economy.

 

Since he just copy and pasted an article, I don't see why you think he was making a point. He didn't write any of that text.

[livincinco]

This is one of the most annoying aspects of the Texas legislature. For a state that theoretically embraces the free market system, the legislative support of the tiered distribution system is really dumb. This is the exact same as what has happened to the craft breweries.

[Slick Vik]

This is one of the most annoying aspects of the Texas legislature. For a state that theoretically embraces the free market system, the legislative support of the tiered distribution system is really dumb. This is the exact same as what has happened to the craft breweries.

 

Yeah

[LTAWACS]

It's the corrupt apes in Austin.

[livincinco]

The same thing is happening to Uber in Dallas.  Old fashioned cronyism trying to drive out a new competitor.

[bachanon]

it isn't so much about keeping tesla out as it is about keeping manufacturers from selling directly to consumer's which could eliminate the need for dealerships.  if tesla sold franchises (which come with many strings attached; they could control how the product is sold), they might have an opportunity for enormous sales.  people are test driving teslas, flying out to california and driving one home.  gm's drive to sell direct online might be something dealers should be worried about too.  tesla should approach luxury car manufacturers and save one lucky company the trouble and cost of developing a significant all electric vehicle.  not sell out, but "offer" the exclusivity of offering the tesla brand via a stringent franchise agreement.  tesla should not be all or nothing; they need to have alternative models.

[livincinco]

I agree that it's not particularly about keeping Tesla out, but it is about protecting a group of individuals which are potentially negatively impacted by a new business model.  It's reasonably prevalent in Texas in spite of the "free enterprise" image that the state projects.  It's happening in Dallas (and other cities across the country) where city government is protecting taxi drivers from new competition, it happened with protecting distributors by preventing craft brewers from going direct and it's happening again where dealers are getting protected from car manufacturers going direct.  I'm sure that there are other examples too.

 

Just not what I would hope from Texas.