Tesla Motors Battles for Right to Sell Directly to the Public in Texas

Silicon Valley-based Tesla Motors, Inc. is attempting to buck the system by selling its electric cars through a nationwide network of company owned dealerships, instead of through franchises as virtually every other automaker does.  In addition to opposition from a number of dealership associations around the nation, Tesla is also in an uphill battle to have a Texas law which requires automakers to sell their vehicles through franchised dealers overturned.

A proposal has been introduced to the Texas legislature that would allow domestic manufacturers of battery-powered vehicles to sell directly to the public, but it is not without its opponents, including the Texas Automobile Dealers Association. The association’s CEO of legislative affairs Rob Braziel said, “We don’t see any business reason or law reason that this product should receive a special exception from the law that applies to everyone else.”

Speaking with reporters in Austin last Wednesday, Tesla CEO Elon Musk said of the current law, “Nothing could be further from what Texas is all about.”  He went on to ask, “Is Texas a free enterprise state or not? In this particular area, it is the worst in the country.”

Democratic State Representative Eddie Rodriguez, who authored the new bill, said he would like to see the two sides negotiate an agreement.  He said, “I’m not trying to dismantle the current system, but at the same time, we can’t let the system get in the way of breakthrough technology.”

In Austin to show his support for the legislation, Musk told reporters that he is not confident that it will pass; however, he said that Texas Governor Rick Perry had told him that he would sign the legislation if it makes it to his desk.

Governor Perry’s office would neither confirm nor deny Musk’s claim. In an email, the Governor’s spokesman Josh Havens said, “Unfortunately, I’m not privy to the personal conversations the governor has, so I can’t confirm that for you. The legislature will debate a number of bills this session and the governor will thoroughly review any that make it through the process and arrive on his desk.”

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