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Bill To Let Tesla Sell Direct In Texas May Sputter Out And Die

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If you were hoping 2015 would be the year that Texas lawmakers would finally vote to allow Tesla Motors to sell their cars direct to customers in the Lone Star State, you may want to pin your hopes on the 2017 legislative session instead. The latest direct sales bill has been met with considerable opposition.

The Dallas Morning News reports on the progress of the bill, and it isn’t good. The bill authored by Democratic Rep. Eddie Rodriguez would allow an independent newcomer like Tesla to have up to 12 stores in the state where they could sell cars. A companion bill was filed in the State Senate by Dallas-area Republican Sen. Kelly Hancock.


But Rodriguez’s bill has gone to the House Licensing and Administrative Procedures Committee, and none of the lawmakers in that group have expressed support for the bill. From the DMN:

While some lawmakers indicated they like a free market, none on the licensing committee came out in clear support of the bill. Much of the legislators’ discussion focused on concerns that the bill would create two systems, hurting the dealerships that have been playing by the rules.

“No one is telling you you can’t have Teslas in Texas,” said Rep. Roland Gutierrez, D-San Antonio. “We’re telling you, abide by the system in place.”


I’m glad “some” of the lawmakers in Texas indicated they “like” the free market. Good to know, guys!

At the moment, would-be Tesla buyers in Texas are prevented from discussing pricing or ordering cars at the many “gallery” locations across the state and even prevented from going on test drives, though many of those let prospective customers test cars regularly anyway. If they buy a Tesla online, the car is delivered in an unmarked truck and customers must unwrap it themselves. It’s all a bit silly.

Naturally, Rodriguez’s bill has received considerable pushback from car dealers and their advocates, groups with tremendous spending and lobbying power. They spend millions on campaign contributions, and while Tesla brought their lobbying A-Game this time around, they still may not be able to compete.

From the Texas Tribune’s report on Monday night’s committee hearing:

Opponents pushed back against Rodriguez’s bill on Monday, arguing that it creates two separate systems for car sales — one for Tesla and one for everyone else.

“Everyone should play by the same rules,” said Bill Hammond, CEO of the Texas Association of Business.

“It’s a solution looking for a problem. Tesla’s problems are self-imposed,” said Carroll Smith, who represents Texas on the National Automobile Dealers Association board in Washington, D.C.


While Texas’ lawmakers on both sides of the political aisle have been slammed for not advocating for more free market solutions to this issue, this has less to do with ideology and pretty much everything to do with campaign contributions. A search of Texas Ethics Commission records reveals that Rep. Roland Gutierrez, the San Antonio Democrat quoted as coming out against the bill, is a recipient of Texas Automobile Dealers Association campaign funds.

To know why dealers don’t want this to happen, let’s turn once again to the DMN:

Meanwhile, Rep. Charlie Geren, R-Fort Worth, was concerned that changing the system opens the door for existing manufacturers to create new companies through which they could sell directly to customers.


We can’t have competition! That’s a threat to the free market!

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