Texas Slightly Opens The Door To Tesla Operations In The Lone Star State
Tesla has been fighting some high profile battles across the country to get their boutique dealer stores into high traffic areas. And other than in Virginia, they have had quite a bit of success battling opposing state dealership associations.
In Texas however, existing franchise laws prohibit Tesla from even getting their foot in the door; so the California EV maker is taking the fight straight to the Texas legislature to change those laws.
Tesla maintains they should gain a special exemption because A) they are an electric vehicle maker and B) they have had no previous dealings in the state, hence no franchisees would be affected.
And to say winning this battle would be extremely tough, would be an understatement.
Now, despite the Texas Automotive Dealer Association working against any Tesla exemption, the House Business and Industry Committee has forwarded bill 3551 to the full House. This bill would potentially let Tesla sell and service cars directly to Texas residents.
…with some key changes.
According to the Texas Tribune, the original House Bill 3351, has been replaced by a committee substitute that throws the Texas Dealership Association a guarantee of sorts, provided (big if) Tesla manages to get new legislation through.
Under the new proposed changes, if Tesla sells more than 5,000 cars in any calendar year inside Texas, it will immediately become subject to existing franchise regulations and must start to franchise its operations if it wishes to continue operations in Texas.
For now, or in the near future, Tesla does not expect to sell anywhere near that amount of Model S sedans anywhere in the United States (other than California of course), so Diarmuid O’Connell, who is the VP of business development for Tesla, understandably has no problem with this arrangement, saying “This would give us the space we need to introduce our technology in the state.”
Currently, Tesla has boutiques in both Houston and Austin. However, the company is legally prohibited from discussing the price, servicing or acquistion on the Model S.
Even Tesla CEO, Elon Musk himself, is not very optimistic that this modified bill will ultimately be successful this session, but he is willing to continue to fight almost indefinitely for the right to sell electric cars in Texas:
“The consensus among the auto industry is that we’re not going to succeed,” he said to the Texas Tribune, “but if we don’t succeed this session, we’ll come back again.” Earlier the CEO noted, “…for us, this is life or death, if we can’t go direct, we will not be able to sell cars.”
Hat tip to Josh B for the timely heads-up on this one