Tesla Sees Two More Bills For Direct Sales Die In Texas

Tesla saw two bills die in the Texas state legislature Monday, another defeat in its years-long campaign to sell cars directly to consumers.

The electric automaker had taken a broader approach this time with its proposed legislation allowing all types of vehicle manufacturers to engage in direct auto sales in that state.

Tesla had previously taken on two legislative battles that failed, which asked for the right to sell its cars directly to consumers. Franchised dealers have been battling to keep the electric carmaker out of Texas based on the franchise-dealer-only law also seen in several other states.

“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,” Tesla said in a statement.

The market is a tough one for Tesla to lose as it prepares to manufacture and sell its Model 3 at high volumes. Texas is the second largest auto retail market in the U.S. after California.

Tesla CEO Elon Musk has spent a lot of time lobbying and networking in the state – for Tesla direct sales and a possible second manufacturing plant, along with previous consideration of placing the Gigafactory there and a SpaceX facility.

It doesn’t look good for Tesla ever being able to enter the Texas market under its current legal infrastructure for car sales.

In 2013, HybridCars had a lengthy phone interview with Texas Auto Dealers Association (TADA) President Bill Wolters. The former Ford executive, who had joined the association in 1982, acknowledged Musk for waging a successful PR campaign.

He explained that Tesla was facing very narrowly written franchise laws that Musk “cannot wiggle through,” Wolters said.

SEE ALSO:  Why Auto Dealer Associations Oppose Tesla

Wolters talked about Tesla representing other companies in a highly charged battle at the heart of concerns expressed by auto dealer associations – keeping hard-won rights and privileges afforded to businesses and communities both large and small.

Tesla’s lobbying efforts have been seen as a battleground for dealers and their associations to fight that affect many communities who depend on them for their transportation needs, economic base, and even their direct livelihoods.

Other automakers have made efforts to reduce their dealer networks and possibly take over direct sales. Ford Motor Co. failed to launch its Ford Retail Network in Texas in the late 1990s.

For now, Tesla represents the symbol of what dealers in Texas and around the country fear about the future of franchised dealerships – and the challenge of competing with Tesla to sell electric cars.

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