Tesla’s direct sale effort in Texas fails again, complicating things for Model 3 buyers

Tesla has been leading direct sales battles this year on several fronts in Utah, Connecticut, Indiana, and several other states.

They lost the battle in the Lone Star State this week after bills to allow direct sales by automakers died in Texas state House and Senate.

Earlier this year, the company tried to appeal to Texas’ supposedly strong appreciation for the free market with Senate Bill 2093 and House Bill 4236, which would have allowed any automaker to sell cars in the state and bypass the third-party dealership state-created monopoly on car sales.

But their effort wasn’t enough to counter the lobbying effort of the local car dealerships and the legislature killed the bills.

Tesla commented on the news:

“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. We will continue to advocate for fair, common-sense reforms that will allow Tesla to invest in Texas and provide consumers the same choices car-buyers in nearly every other state enjoy.”

It’s the third time that Tesla is shut down in the state, but this one comes at a very unfortunate time for the company and its prospective Texan buyers since thousands of them have already reserved the Model 3.

Despite not being allowed to sell in the state, Texas is still an important market for Tesla. They operate 11 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.

That’s not an ideal situation, but it is manageable for the volume of the Model S and Model X. It’s different for the Model 3, which is half the price and will be delivered in much higher volume.

Tesla hoped that the situation would have been resolved by the time the Model 3 debuts in Texas, which could be by the end of the year. It will be interesting to see how it will impact the rollout.