Texas bills may allow Tesla to open up to 12 stores

Article by Andrew Christian, on February 26, 2015

Texas may become home to up 12 Tesla stores selling cars directly to customers. This comes as state Reps. Eddie Rodriguez, Charles Anderson, Jodie Laubenberg, Tan Parker and Rod Simmons and Sen. Kelly Hancock recently filed bills that would enable Tesla implement its direct sales model in the state.

Under current state law, new vehicles could only be purchased via a franchised dealership. The bills -- House Bill 1653/Senate Bill 639 -- proposed that a carmaker or distributor may be considered a dealer if they does not own or operate over 12 dealers or dealership locations in Texas, and if they have yet to sell any vehicle via independent franchised new-vehicle dealerships in the state.

As expected, the bills are being opposed by dealers, according to Bill Wolters, president of the Texas Automobile Dealers Association. Texas has 1,257 franchised new-vehicle dealerships, and a number of them are already contacting members of the Texas House and Senate to air their concerns, he said.

Wolters noted that since Tesla is a California corporations, all proceeds from the sale go to California and nothing goes to Texas. “There’s no real benefit for our state,” he said. He added that dealers have “a greater push” to take care of local customers.

He noted that if the bills get passed, carmakers like Tesla won’t have competition, adding that there will be no reason to negotiate prices sans that competition. He also quipped that carmakers’ focus will be to make as much money as possible to satisfy their stockholder, rather than their customers. Hancock, however, disagrees with their views.

He said in a statement that the bill helps sustain a competitive marketplace and provides consumers more choices. Laubenberg added that Texas should not be a protectionist state that would kill innovation in the auto industry. He instead called for allowing the free market to decide the fate of new ideas.

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