After looking into the issue of Tesla’s right-to-sell in Texas, talking with other owners, and visiting the Capitol for our Austin Capitol Day, those involved have some thoughts to share. The information below was gathered from a few sources so wanted to thank those involved. I also wanted to thank everyone who has been working on this as owners and fans of Tesla including John, Dianne and Doug, Stephen, David, Bill and many others. I’m sure I am leaving someone out and there are many others who we don’t know about I’m sure who worked on this. Our Capitol Day was a very small part of this overall push and just the start of this effort. I‘m sure others, including Tesla, have been working behind the scenes for years to make buying a Tesla in Texas a more normal and easy process.
Issue:
Under the current Texas Occupations Code (TEX OC. CODE ANN. § 2301.476), Tesla is unable to sell its vehicles directly to the public because it has no franchised dealer relationships in Texas (or anywhere else in the United States or world for that matter). This regulation not only affects Sales, but also Service of Tesla vehicles for existing customers.
How does this affect you?
In short – it complicates everything Tesla does in Texas.
Here are some examples:
Sales: Tesla currently operate two galleries in Austin and Houston. In an effort to comply with the current laws, employees at these galleries are prevented from discussing pricing and the reservation process. This includes any discussion on financing, leasing, or purchasing options. Also, galleries cannot offer test drives. All Texas interactive kiosks are also amended to remove pricing. The fact that Tesla can't legally discuss the price of its American made product is hard to understand, and does not fit with the small government and free-enterprise principals that Texas embodies. Lastly, Tesla is unable to refer the customer to a Tesla store out of state. This puts Tesla at a serious disadvantage to other car sales establishments in just about every obvious way and inhibits Tesla’s ability to reduce perceptions of limitations of Electric Vehicles through any sort of comprehensive education on the vehicle or the technology.
Delivery: Cars are shipped to Texas via a third-party transport company. Tesla employees cannot accompany the vehicle or provide information or guidance on operations until 48 hours after the customer takes delivery. In an attempt to accommodate customers, owners are invited to watch online tutorials on the various vehicle functions – or they can call the Tesla Service number and speak to someone at Tesla Motors, Inc. in Fremont, CA regarding their questions, but this limitation severely impedes customers' use of their automobile in a way no other brand suffers.
Registration: Normally, registration for the vehicle is included in the final paperwork submitted to take ownership of the vehicle. Tesla does this for its customers in other states. In Texas, customers must first take ownership of their vehicle and then register the vehicle themselves at the Texas DPS. At this time, they pay Texas Registration and Titling Fees – but most importantly, Texas sales tax. Because this process occurs after the sales transaction, many Tesla customers have reported their inability to fold the sales tax cost into the total cost of the vehicle for financing purposes. In some cases, customers have to pay more than $5,000 out of pocket that they otherwise could have paid for over years of financing. This isn’t fair to Texas Tesla Customers!
Service: Customers who are in need of warranty service must call the Tesla Service number and speak to someone at Tesla Motors, Inc. in Fremont, CA, which is a licensed dealership location in California. There a Tesla Service employee in Fremont will determine if warranty repair work is needed/warranted. If so, they will send authorization to sub-contract the work to a local subsidiary, Tesla Motors TX. The local repair centers – currently in Austin and Houston – cannot advertise that they do warranty repairs nor can they discuss any other warranty repairs with the customer, and can only fix the problem that Tesla Motors, Inc. authorized for warranty repair service. Tesla Motors TX then bills Texas Motors, Inc. for the work and the work is covered by warranty to the customer through Tesla Motors, Inc. If customers have additional warranty concerns, Tesla Motors TX cannot discuss them with the customer – the customer would need to call Tesla Motors, Inc. back and go through the process again.
Often, this process requires Tesla to use out of state labor as well. Thus Texas is losing money, not only in terms of payroll tax but in additional spending income by those service technicians.
What is Tesla trying to do about it?
In short - Tesla wants to provide the same level of customer service to Texans that it provides to customers in Florida, Minnesota, Missouri, California, North Carolina, Oregon, Massachusetts, New York, and many other states, but can't because of these protectionist rules.
Prior to the filing deadline, it appears Tesla Motors reached out to Sen. Craig Estes (R-Wichita Falls) and Rep. Eddie Rodriguez (D-Austin) who agreed to file bills on their behalf. These bills would permit U.S.-based manufacturers of all electric- or all battery-powered vehicles to sell directly to Texas consumers. This approach does not harm any existing franchise and addresses dealer concerns that foreign manufacturers of conventional automobiles may by-pass existing franchise laws and regulations.
As current and potential future owners, we are very fortunate to have recently been notified that both bills will receive hearings in their assigned committees:
In the Senate, SB 1659 was referred to the Transportation and Homeland Security Committee. A hearing has been scheduled for Wednesday, April 3rd, beginning at 8am in Hearing Room E1.016. Diarmuid O’Connell, Tesla Motors VP of Business and Corporate Development will testify as will a representative from TADA and TXDCP.
In the House, HB 3351¸was referred to the Business and Industry Committee. A hearing date has yet to be scheduled, but is likely to occur within the next 2-3 weeks.
What can we as supporters do?
1) Take a look at the Senate and House Committee websites – if you or your friends are represented by a State Representative or Senator on this committee, feel free to contact their Capitol office and register your support:
Some examples:
“I’m calling to register my support for SB 1659/HB 3351 – I want what’s fair! Texas dealers are preventing my car from being repaired efficiently and forcing money out of state.” [see point about this in explanation of Tesla Service in Texas]
“I’m calling to register my support for SB 1659/HB 3351 – I believe in the free market!”
“I’m calling to register my support for SB 1659/HB 3351 – I support new business coming to Texas!”
2) Attend a hearing at the State Capitol (BRING YOUR TESLA!) and register your support and/or seek an opportunity to testify in favor of the bill
a. In the Senate, you must fill out a witness affirmation card BEFORE the meeting begins in order for it to be counted.
b. In the House, you use an iPad attached to the wall that can be found throughout the Capitol. With the iPad registration, people can register any time before
the hearing, so again, they can stop by in the morning, fill out the info on the iPad, and leave without ever stepping foot in the committee. Here’s some
additional information on those stations. You must register your support BEFORE the hearing begins.
c. Unless you wish to testify, you can fill out the card and leave. Those wish to speak will have to wait until the bill comes up for discussion in accordance with
the hearing schedule
The Texas Capitol opens at 7am.
For those interested in coming down, Parking is available in the Capitol Visitors Parking Garage at 1201 San Jacinto located between Trinity and San Jacinto Streets at 12th and 13th streets. Alas, there does not appear to be an EV charging at the facility. This is where we hosted our mini Austin Capitol Day.
Additional Facts about Tesla:
-Tesla operates 2 Galleries in the State of Texas (Austin and Houston). Tesla also operates 2 Service Centers (with limited capability) in those locations with an additional service center in Dallas.
- There are over 400 Tesla Roadster and Model S owners in Texas currently with more arriving every week!
-Franchises have been proven to increase the cost to purchase a vehicle (an average of 6% on every transaction) – U.S. Department of Justice Study “Economic Effects of State Ban on Direct Manufacturer Sales to Car Buyers”
- Every new Tesla store brings an additional $7-12 million to the local economy in their first year and approximately 20 new jobs.
-Tesla Motors is a U.S.-based, American-owned manufacturer of battery electric vehicles (EV) founded in 2004 with a mission to catalyze the mass market for electric vehicles.
-Tesla successfully launched the Roadster in 2008 with its industry-leading efficiency (over 200 miles of range on a single charge), performance (0 to 60 mph in up to 3.7 seconds), and design.
-According to Bob Lutz, as a result of Tesla’s accomplishments, General Motors developed and introduced the Chevy Volt, a plug-in hybrid-electric vehicle, in 2010.
- The Tesla Model S is built entirely at a formerly shuttered GM plan in Fremont, California, where the Tesla currently employs over 4,000 engineers and manufacturing associates.
- Tesla's Model S was launched in 2012 to wide industry acclaim including Motor Trend’s 2013 “Car of the Year,”, Automobile Magazine’s “Car of the Year”, Yahoo Autos “Car of the Year” and most recently, “World Green Car of the Year”
Issue:
Under the current Texas Occupations Code (TEX OC. CODE ANN. § 2301.476), Tesla is unable to sell its vehicles directly to the public because it has no franchised dealer relationships in Texas (or anywhere else in the United States or world for that matter). This regulation not only affects Sales, but also Service of Tesla vehicles for existing customers.
How does this affect you?
In short – it complicates everything Tesla does in Texas.
Here are some examples:
Sales: Tesla currently operate two galleries in Austin and Houston. In an effort to comply with the current laws, employees at these galleries are prevented from discussing pricing and the reservation process. This includes any discussion on financing, leasing, or purchasing options. Also, galleries cannot offer test drives. All Texas interactive kiosks are also amended to remove pricing. The fact that Tesla can't legally discuss the price of its American made product is hard to understand, and does not fit with the small government and free-enterprise principals that Texas embodies. Lastly, Tesla is unable to refer the customer to a Tesla store out of state. This puts Tesla at a serious disadvantage to other car sales establishments in just about every obvious way and inhibits Tesla’s ability to reduce perceptions of limitations of Electric Vehicles through any sort of comprehensive education on the vehicle or the technology.
Delivery: Cars are shipped to Texas via a third-party transport company. Tesla employees cannot accompany the vehicle or provide information or guidance on operations until 48 hours after the customer takes delivery. In an attempt to accommodate customers, owners are invited to watch online tutorials on the various vehicle functions – or they can call the Tesla Service number and speak to someone at Tesla Motors, Inc. in Fremont, CA regarding their questions, but this limitation severely impedes customers' use of their automobile in a way no other brand suffers.
Registration: Normally, registration for the vehicle is included in the final paperwork submitted to take ownership of the vehicle. Tesla does this for its customers in other states. In Texas, customers must first take ownership of their vehicle and then register the vehicle themselves at the Texas DPS. At this time, they pay Texas Registration and Titling Fees – but most importantly, Texas sales tax. Because this process occurs after the sales transaction, many Tesla customers have reported their inability to fold the sales tax cost into the total cost of the vehicle for financing purposes. In some cases, customers have to pay more than $5,000 out of pocket that they otherwise could have paid for over years of financing. This isn’t fair to Texas Tesla Customers!
Service: Customers who are in need of warranty service must call the Tesla Service number and speak to someone at Tesla Motors, Inc. in Fremont, CA, which is a licensed dealership location in California. There a Tesla Service employee in Fremont will determine if warranty repair work is needed/warranted. If so, they will send authorization to sub-contract the work to a local subsidiary, Tesla Motors TX. The local repair centers – currently in Austin and Houston – cannot advertise that they do warranty repairs nor can they discuss any other warranty repairs with the customer, and can only fix the problem that Tesla Motors, Inc. authorized for warranty repair service. Tesla Motors TX then bills Texas Motors, Inc. for the work and the work is covered by warranty to the customer through Tesla Motors, Inc. If customers have additional warranty concerns, Tesla Motors TX cannot discuss them with the customer – the customer would need to call Tesla Motors, Inc. back and go through the process again.
Often, this process requires Tesla to use out of state labor as well. Thus Texas is losing money, not only in terms of payroll tax but in additional spending income by those service technicians.
What is Tesla trying to do about it?
In short - Tesla wants to provide the same level of customer service to Texans that it provides to customers in Florida, Minnesota, Missouri, California, North Carolina, Oregon, Massachusetts, New York, and many other states, but can't because of these protectionist rules.
Prior to the filing deadline, it appears Tesla Motors reached out to Sen. Craig Estes (R-Wichita Falls) and Rep. Eddie Rodriguez (D-Austin) who agreed to file bills on their behalf. These bills would permit U.S.-based manufacturers of all electric- or all battery-powered vehicles to sell directly to Texas consumers. This approach does not harm any existing franchise and addresses dealer concerns that foreign manufacturers of conventional automobiles may by-pass existing franchise laws and regulations.
As current and potential future owners, we are very fortunate to have recently been notified that both bills will receive hearings in their assigned committees:
In the Senate, SB 1659 was referred to the Transportation and Homeland Security Committee. A hearing has been scheduled for Wednesday, April 3rd, beginning at 8am in Hearing Room E1.016. Diarmuid O’Connell, Tesla Motors VP of Business and Corporate Development will testify as will a representative from TADA and TXDCP.
In the House, HB 3351¸was referred to the Business and Industry Committee. A hearing date has yet to be scheduled, but is likely to occur within the next 2-3 weeks.
What can we as supporters do?
1) Take a look at the Senate and House Committee websites – if you or your friends are represented by a State Representative or Senator on this committee, feel free to contact their Capitol office and register your support:
Some examples:
“I’m calling to register my support for SB 1659/HB 3351 – I want what’s fair! Texas dealers are preventing my car from being repaired efficiently and forcing money out of state.” [see point about this in explanation of Tesla Service in Texas]
“I’m calling to register my support for SB 1659/HB 3351 – I believe in the free market!”
“I’m calling to register my support for SB 1659/HB 3351 – I support new business coming to Texas!”
2) Attend a hearing at the State Capitol (BRING YOUR TESLA!) and register your support and/or seek an opportunity to testify in favor of the bill
a. In the Senate, you must fill out a witness affirmation card BEFORE the meeting begins in order for it to be counted.
b. In the House, you use an iPad attached to the wall that can be found throughout the Capitol. With the iPad registration, people can register any time before
the hearing, so again, they can stop by in the morning, fill out the info on the iPad, and leave without ever stepping foot in the committee. Here’s some
additional information on those stations. You must register your support BEFORE the hearing begins.
c. Unless you wish to testify, you can fill out the card and leave. Those wish to speak will have to wait until the bill comes up for discussion in accordance with
the hearing schedule
The Texas Capitol opens at 7am.
For those interested in coming down, Parking is available in the Capitol Visitors Parking Garage at 1201 San Jacinto located between Trinity and San Jacinto Streets at 12th and 13th streets. Alas, there does not appear to be an EV charging at the facility. This is where we hosted our mini Austin Capitol Day.
Additional Facts about Tesla:
-Tesla operates 2 Galleries in the State of Texas (Austin and Houston). Tesla also operates 2 Service Centers (with limited capability) in those locations with an additional service center in Dallas.
- There are over 400 Tesla Roadster and Model S owners in Texas currently with more arriving every week!
-Franchises have been proven to increase the cost to purchase a vehicle (an average of 6% on every transaction) – U.S. Department of Justice Study “Economic Effects of State Ban on Direct Manufacturer Sales to Car Buyers”
- Every new Tesla store brings an additional $7-12 million to the local economy in their first year and approximately 20 new jobs.
-Tesla Motors is a U.S.-based, American-owned manufacturer of battery electric vehicles (EV) founded in 2004 with a mission to catalyze the mass market for electric vehicles.
-Tesla successfully launched the Roadster in 2008 with its industry-leading efficiency (over 200 miles of range on a single charge), performance (0 to 60 mph in up to 3.7 seconds), and design.
-According to Bob Lutz, as a result of Tesla’s accomplishments, General Motors developed and introduced the Chevy Volt, a plug-in hybrid-electric vehicle, in 2010.
- The Tesla Model S is built entirely at a formerly shuttered GM plan in Fremont, California, where the Tesla currently employs over 4,000 engineers and manufacturing associates.
- Tesla's Model S was launched in 2012 to wide industry acclaim including Motor Trend’s 2013 “Car of the Year,”, Automobile Magazine’s “Car of the Year”, Yahoo Autos “Car of the Year” and most recently, “World Green Car of the Year”
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