How Petty Money Politics Crushed Tesla In Texas

Texas Gov. Rick Perry is fond of saying that his pro-free market state is "wide open for business." It turns out that sentiment may only be true if you don't dare challenge the entrenched good old boys and their mountains of cold, hard cash like Tesla Motors did.

Over the past year Tesla has taken its fight for direct car sales to several states, but it got its ass thoroughly and completely handed to it in Texas. Being a scrappy and successful new automaker has nothing on the powerful and cash-flush car dealer lobby that has been a powerful force in Texas politics for decades, according to a new report from the nonprofit Texans for Public Justice.


You've probably heard that Tesla not only wants to revolutionize the car itself, but the way we buy them as well. Elon Musk would like to see a world in which car shoppers buy direct from vehicle manufacturers, not through independent third party dealership chains. After all, why is it you can buy a MacBook Air direct from Apple, but you can't buy a Mustang from Ford or a Model S from Tesla?

But thanks to the efforts of the late Gene Fondren, who passed away in 2010 but was a legislator, lobbyist and longtime head of the Texas Automobile Dealers Association, Texas has some of the toughest car dealer protection laws in the country. As Automotive News reports, Fondren's built a powerful legacy that continues to prohibit direct-to-customer sales in Texas today.

Do you want to know what employees at the Tesla stores are allowed to do? Legally, not much. From the report:

Employees in Tesla car galleries in Austin and Houston are legally prohibited from offering visitors a test drive, quoting them a price or even directing them to Tesla’s website. If a Texan does order a Tesla from California, the car must be delivered by third-party trucks that cannot advertise the Tesla brand.


It doesn't seem very fair, does it? During the most recent Texas legislative session, Tesla got two bills introduced in the State House and Senate that would permit them to sell their cars directly. But the regular legislative session ended in June without a vote on either bill.


Quoting longtime Texas political writer Paul Burka, Automotive News' story notes that lobbyists in that state — as is true in other places — don't have quite the same power they used to, due to changes in ethics laws and other factors.

Still, Tesla tried their hand at winning hearts and minds through political contributions. The Dallas Observer reports that Musk gave $7,500 in campaign contributions and spent somewhere between $255,000 and $565,000 on lobbyists.


But money talks and bullshit walks, and at the end of the day, Tesla didn't have the money and power to compete with the big boys. Compare Musk's contributions to what the car dealers spent from 2011 to 2012, according to the report.


Yeah, not even close.

The largest recipients of dealer cash, according to the report, were Gov. Rick Perry, Attorney General (and now gubernatorial candidate) Greg Abbott, House Speaker Joe Straus, Compotroller Susan Combs and Lt. Gov. David Dewhurst, in that order.


The rest of the recipients were almost overwhelmingly Republican lawmakers which, to be fair, makes sense because the Texas Legislature is overwhelmingly Republican.

However, it's also kind of funny considering these are the same people who claim to be pro-business, pro-capitalism and pro-free market. What would really be the harm of letting carmakers sell direct, besides politicians' car dealer money faucet getting turned off?


It's not like Musk hasn't had any victories with the Texas Legislature. SpaceX got almost no opposition when they sought to build a rocket launch site in Southeastern Texas, a move that would bring jobs and bolster Texas' reputation as a space-friendly state. Those bills got through the Legislature with no problem at all, the report says. Apparently, the same can't happen when car dealer money is on the line.

Musk is also working to make Texas a good place to actually own Teslas, too. A Supercharger station opened in Waco today, adding to the network of stations already in place across the state. Musk says that by the end of the fall, Model S owners will be able to drive through much of Texas for free.


But until Musk can come back to Texas with millions and millions of dollars he's willing to give to politicians, it's going to be business as usual in the Lone Star State.

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