Tesla Loses Their “No Dealership” Selling Plans In Texas, 2nd State To Be Defeated In
After starting with a near flawless record of getting their “direct sales” model past many legal hurdles in various states across the country (as in Massachusetts,. New York and Minnesota), Tesla has since run into some roadblocks; most recently with a loss in Virginia, and a North Carolina battle that seems destined to also fail.
Most recently in Texas, Tesla has lost a legal battle against the Texas Automotive Dealer Association (who had a much stronger legal position to defend their sales model from), to sell their Model S direct in the Lone Star State.
Tesla had sponsored several bills to create a loop-hole in state legislation that would have allowed a smaller, electric car-producing automaker to own and operate their own stores. However, as Automotive News reported this weekend, none of thosebills made it to the Texas House or Senate for a reading.
The next general session where Tesla could be heard does not come until 2015, meaning that Tesla’s two “boutique” shops, one in Houston and one in Texas, with have to continue to only show the car. Tesla and its employees are prohibited from selling, or promoting the Model S as for sale in Texas.
Naturally, Karen Phillips, who was the Texas Dealer’s general counsel, was pleased, “The Legislature did the right thing…”
Tesla did not immediately issue a response to Auto News, but CEO Elon Musk had earlier testified in Texas saying:
“For us this is life or death. If we can’t go direct we will not be able to sell cars.”
The Tesla boss had also teased Texas with a second, larger Tesla assembly facility in the state, that could build an electric truck if the company was permitted to sell direct.
With a North Carolina legal result also expected to end in failure, that would also see Tesla lose the ability to sell and solicit over the Internet, Tesla may be forced to take its battle to the national level.
“Obviously, we don’t want to bother Congress at the federal level unless it seems like something that’s a common issue across a large number of states.”
It seems like that battle is an inevitability now.