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Tesla CEO Elon Musk
This bill would allow Tesla to sell directly to customers without dealerships

Tesla CEO Elon Musk has been showing his support for an electric car sales bill in Texas, which he referred to as a "life or death" situation for companies like Tesla. 

Musk testified Tuesday for House Bill 3351, which would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships. The bill was filed by Rep. Eddie Rodriguez (D-Austin). 

“For us this is life or death,” said Musk. “If we can’t go direct we will not be able to sell cars.”

However, auto dealers don't seem very happy about this decision. Carroll Smith, a representative for the Texas Auto Dealers Association, said that the law shouldn't be changed just for the sake of one manufacturer. 

Musk is open to a dealership model at some point when sales increase, since dealerships do promote competition and keep prices down. 

Tesla currently sells about 10,000 cars in North America, where about 1,500-2,000 are sold in Texas. 

Tesla is shipping over 500 Model S EVs weekly, and recently reported that the company is now profitable thanks to the Model S exceeding sales targets. Tesla Model S sales reached 4,750, which topped the sales outlook of 4,500 posted in the February shareholder letter.
 
In addition, the automaker is partnering with Wells Fargo and U.S. Bank to offer customers more financing options for Tesla’s vehicles. 

Clearly, Tesla is sitting in a nice position right now, but the Texas bill could certainly help reach sales goals. 

Source: Austin Business Journal



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RE: What free market is this?
By DanNeely on 4/11/2013 1:13:38 PM , Rating: 3
The existing rules are business friendly. Auto dealership owners are very good friends of politicians.


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