When Tesla is trying to push for new legislation to allow its direct sales model in a state that is banning it, the automaker generally tries to ask for an exemption for automakers selling electric vehicles or for automakers that never had third-party dealerships. It attracts less opposition – or justified opposition – from local car dealers.
But that approach didn’t work in Texas so the company is trying a different one. Tesla is now supporting a new legislation in the state to allow all automakers to sell directly, which franchise dealers are already calling the end of
the their world.
That way, Tesla cannot be accused of seeking preferential treatment like with their last effort during the previous legislative session.
Senate Bill 2093 and House Bill 4236 have been introduced by state Sen. Bob Hall and state Rep. Jason Isaac is presented as a true free market bill that would allow any automaker to sell cars in the state and bypass the third-party dealership model.
Automakers would be able to compete with dealers for sales and service, but the Texas Automobile Dealers Association is arguing that it would actually “reduce competition”. President Bill Wolters said in a statement Friday (via Texas Tribune):
“Tesla’s legislation seeks to unravel the entire franchised dealer system in Texas, in favor of direct sales of motor vehicles by a manufacturer. SB 2093 and the reduced competition it will bring about in the new vehicle sales and service market will come at the expense of Texans and Texas.”
Of course, the free market nature of the bill is that if the dealers are really creating added value for the consumers, they would still prevail. But their opposition to it is clearly indicating the contrary.
The problem is that the dealerships are strong political contributors and therefore, they have a lot of influence in the state legislature.
During the last session, Tesla tried to compete with them and doubled the size of its lobbyist team, but they didn’t get pass the transport committee.
It will certainly be interesting to see how it will play out this time with the new “pure free market” approach.
Despite not being allowed to sell in the state, Texas is still an important market for Tesla. They operate 9 galleries and service centers where they can inform consumers, but they can’t talk about price or delivery information. Buyers have to go online through Tesla in California.
The timing is important here since there are a lot of Tesla Model 3 reservation holders in Texas and being allowed to sell to them directly would facilitate the process when the vehicle launches later this year.
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