Blog Texas Legislature Kills Direct Sales Bill

Tesla’s efforts for direct sales in Texas were killed Monday by the state legislature.

The automaker had pushed legislation in March that would have allowed vehicles to be sold directly to buyers, rather than through a franchised dealership.

“Once again, the legislature failed to act on Texans’ demands for 21st century car-buying options, meaning the state will continue to fall behind and lose out on valuable economic development opportunities,” the company said in a statement.

 

[Grendal]

They should add to that statement: "Proving clearly that the legislature is influenced by money over the rights and freedoms of its citizens."

And if they really want to get controversial and make national news on the subject add the following: "So Tesla would like to ask directly, how much money will it cost us to change your mind? Since bribery is what matters to the Texas legislature."

It's not going to happen that way, of course. There will be lots more lobbying and maneuvering and Tesla will try again in a few more years.

 

[Rockster]

We Tesla veterans know that Texas' prohibition of direct sales is, at most, a trivial inconvenience; however, I fear this is going to cause much confusion when Joe Average starts lining up to buy the Model 3. Tesla must get ahead of this during the purchase process and make it very clear to Texas residents that they can still buy a Model 3 and what the process entails. Even now, the process isn't consistent. Some people in Texas have reported that the purchase process is more streamlined than before in that there's no longer any need to go stand in line and pay the sales tax separately, but others in Texas report that's not the case. Confusion as to the sales logistics just will not do.

And if Tesla is clever, they'll combine this with their grassroots lobbying efforts so that every Model 3 reservation holder and owner in Texas will be clamoring in support of Tesla when the next legislative session begins.

 

[patrick40363]

Lots of backwards states.

 

[3s-a-charm]

How do I do a "like" and a "disagree" on the same post

I can't believe our elected representatives can't seem to actually represent the people.

 

[ItsNotAboutTheMoney]

How do I do a "like" and a "disagree" on the same post

I can't believe our elected representatives can't seem to actually represent the people.

They represent the people that get them elected. Occasionally that's some of the electorate.

 

[byeLT4]

How disappointing.... But not surprising......

 

[Waiting4M3]

Tesla can still operate galleries so people can see the cars. And people know how to order online, at least a few 100 thousand people did last Spring. So I don't think this is a big roadblock for Tesla.

 

[dmode]

Business FriendlyTM Texas

 

[David99]

I think most car companies don't want to set up their own dealerships and service centers. In fact most manufacturers do not want to deal with the clients directly and let stores do the foot work. There would be some very talented, educated and motivated people in Texas who would love to become a Tesla dealer and they would do an excellent job in sales and service. It's not like the only alternative is going to an old, dishonest car dealer that has no clue about EVs.

 

[stopcrazypp]

I think most car companies don't want to set up their own dealerships and service centers. In fact most manufacturers do not want to deal with the clients directly and let stores do the foot work. There would be some very talented, educated and motivated people in Texas who would love to become a Tesla dealer and they would do an excellent job in sales and service. It's not like the only alternative is going to an old, dishonest car dealer that has no clue about EVs.

That may be true, but as soon as that happens, the dealer groups are going to point to that dealer as one the law should protect, and also say that if Tesla can do it in that one instance why isn't it appropriate to force them to do it everywhere in the state.

A lot of the dealer laws started with the idea of protecting franchised dealers from predatory manufacturer owned stores. But they evolved into direct bans.

I don't really see the chances of a third party franchised dealer happening until at least the laws in the given state allows for direct sales. If they open a third party dealer before then, there is pretty much no chance of the ban on direct sales being lifted.

 

[voyager]

Just as Texas was shutting the door on Tesla over their direct sale model last week, they relaunched their $2,500 electric vehicle rebate to spur EV adoption. While it’s good news for EV buyers in general, Tesla buyers are not likely to have access to the program since its going through dealerships, which Tesla is not allowed to operate in the state.

Texas brings back $2,500 electric vehicle incentive, but Tesla buyers could be blocked

 

[dgpcolorado]

...I can't believe our elected representatives can't seem to actually represent the people.

But car dealers are "people" too and they actually contribute sizable amounts to campaigns. Who better to "represent" than the dealers who line the elected representatives' pockets? Seems simple enough!

 

[DragonWatch]

Texas, because of its legislature/state elected leadership has never been know for doing the right thing ~ probably ever, I do not see this as a major concern for buyers of Tesla products.

If the population really wants to buy a Tesla, they will find a way. Once Tesla builds their SC stations, service centers, and as word of mouth spreads the masses will find a way to put a M3 in their garage despite the political system.

If I were a neighboring state I would encourage Texas citizens to order on line with pick up in their state. Encourage tourism while picking up their car. Takes spending money away from Texas.

 

[arcus]

Texas, because of its legislature/state elected leadership has never been know for doing the right thing ~ probably ever, I do not see this as a major concern for buyers of Tesla products.

If the population really wants to buy a Tesla, they will find a way. Once Tesla builds their SC stations, service centers, and as word of mouth spreads the masses will find a way to put a M3 in their garage despite the political system.

If I were a neighboring state I would encourage Texas citizens to order on line with pick up in their state. Encourage tourism while picking up their car. Takes spending money away from Texas.

It's been like this for a long while. Worry not, Tesla ownership is going strong in Texas. Quite a few people around have a reservation for Model 3 and they are well aware of not being able to buy directly in our state. That doesn't concern them the least (neither did me when I was ready to buy Model S).

There's a decent SC infrastructure in place and more to come. Maybe Texas leadership will learn from their mistake when it is time for GF2...

 

[LCR1]

Manufacturer direct also puts a monopoly on prices.

 

[mongo]

Manufacturer direct also puts a monopoly on prices.

Tesla has a monopoly on Tesla's, not on automobiles. Same is true for Ford and Toyota.

Show me any manufacturer that doesn't have exclusive control on their wholesale price.

The variation between (same brand) dealership prices is based on who is willing to make less on the sale. No one would willingly go below their cost.

Edit typo

 

[TheTalkingMule]

There's no such thing as bad publicity.

 

[DragonWatch]

So, some very good comments here (above).

How can Texas prevent direct sales?

Block the internet? Arrest the buyer at point of sale? Fine/tax Tesla for every car picked up in Texas?

At what point do the citizens rebel?

At what point does Tesla sue Texas for failur to allow free trade?

Blocking the internet is against free speech?

Is the Texas legislature proving they are anti the lone state?

 

[Electroman]

DMV could refuse to register your car stating the car was not bought through legal channels