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Two Bills Filed In Texas To Legalize Tesla Direct Sales

Illustration for article titled Two Bills Filed In Texas To Legalize Tesla Direct Sales

Tesla Motors tried to legalize direct sales in the Lone Star State in 2013, but came up way short against the car dealers and their deep pockets. Now they're back with a lot of money, and today two bills were filed in the Texas Legislature aiming to allow for direct Tesla sales.


The Texas Tribune reports that the bills, House Bill 1653 and its companion Senate Bill 639, aim to amend the state's law regarding car sales to allow manufacturers who have never sold through independent dealerships before to have up to 12 stores for direct sales. In other words, if passed, Tesla could have up to 12 stores with which to sell cars directly in Texas.


The idea is modeled after deals Tesla has struck in other states, like New York, Ohio and Pennsylvania. It has bipartisan support as well — the House version was filed by a Democrat, and the Senate version was filed by a Republican.

"Free market principles are the foundation of our strong Texas economy," said state Sen. Kelly Hancock, R-North Richland Hills, who filed the Senate bill. "SB 639 helps sustain a competitive marketplace and gives consumers more choices."

There are about 1,800 Model S-es registered in Texas, all of which were purchased out of state or online. Tesla prefers to sell its cars direct to customers, rather than through independent third-party car dealers; this practice is outlawed in Texas, as is the case in many states.

Tesla has said they've been approached by dealers who want to franchise with them, but they have declined. They've said they prefer direct sales because the track record for electric car companies whose products are sold by dealers is historically poor, and because they fear dealers would steer customers away from Teslas in favor of more conventional vehicles, among other reasons.


Naturally, dealers fear this model because they worry it would open the door for other automakers to own their own stores, creating more competition for them.

Tesla tried to change the law in 2013 but the legislative session ended without a vote. This time they're trying again with as much as $1.18 million on lobbyists. But don't expect dealers to roll over. Once again, from the Tribune:

"Tesla asks for an exception to state law that eliminates their completion, allows them to sell their vehicles at one non-negotiable list price and export their profit out of state, leaving no benefit for Texas," Bill Wolters, president of the Texas Automobile Dealers Association. "The Texas franchised dealer system protects consumers and prevents monopolies through competition on motor vehicle sales and service."


We'll see what happens, won't we?

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Serious question: I see 5-6 Tesla's per day in Houston, and they have a store front in the Galleria here. Why do they need this bill to change anything the way they are doing business in TX?