Print 25 comment(s) - last by captainBOB.. on Apr 12 at 6:53 PM

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: Ummm...
By Florinator on 4/11/2013 1:14:24 PM , Rating: 2
I see the big deal here... "big government", overregulation, take your pick! If I want to order some item from, you think it's ok if the government forces Amazon to have a warehouse in Texas for me to be able to buy something?

And I find it highly ironic that it's a democratic lawmaker pushing for deregulation :-)

RE: Ummm...
By Motoman on 4/11/2013 1:37:32 PM , Rating: 1
By the same token, if you want to do business in a place, you need to abide by the laws of that place. If you don't agree with those laws, you can choose to not do business there.

I'm not saying the law is right or wrong - I'm saying it's the law.

So open a single dealership and be done with it. It could be on a 1/4" acre lot in the middle of nowhere so it doesn't even cost anything.

RE: Ummm...
By iaco on 4/11/2013 2:05:58 PM , Rating: 5
Or you could try to change ridiculous laws and unnecessary regulations. Of course, Tesla should get the voters on board.

RE: Ummm...
By Motoman on 4/11/2013 4:09:07 PM , Rating: 2
...and in the meantime? You know how long things can drag out in court.

By all means, work to change a law that you think doesn't make sense. Personally I don't think it makes sense either.

But for all the effort it would take to open one token dealership in TX? Just do it, and be able to sell your cars in TX the whole time.

RE: Ummm...
By JediJeb on 4/11/2013 4:37:38 PM , Rating: 2
According to the other post here Tesla can't just open a dealership since they can not be a dealer and a manufacturer.

RE: Ummm...
By othercents on 4/11/2013 4:24:22 PM , Rating: 4
The reason for the restriction of manufactures not owning dealerships was because the manufacturer would have an unfair advantage on price including setting unreasonable purchase costs for dealerships and once they got a monopoly on the selling vehicles they could increase the cost to unreasonable amounts. While this doesn't makes sense for vehicles that are manufactured in low quantities, it does make sense for everyday vehicles.

(h) A person who on June 7, 1995, held both a motor home manufacturer's license and a motor home dealer's license issued under this chapter may:
(1) continue to hold both licenses; and
(2) operate as both a manufacturer and dealer of motor homes but of no other type of vehicle.

Per the Texas Occupations Code 2301.476 there is already an exception for manufactures to also be the dealer for motorhomes however the exception should really state vehicle manufacturers that produce less than X amount of vehicles per year.


RE: Ummm...
By crimson117 on 4/11/2013 2:15:51 PM , Rating: 2
I'm not saying the law is right or wrong - I'm saying it's the law.

Yeah but the law is not written in stone, which is why this bill is looking to change it...

RE: Ummm...
By kingmotley on 4/11/2013 3:04:48 PM , Rating: 2
Motoman, not within the United States. Only the federal government has the right to set laws regarding interstate commerce, not the states themselves.

This actually seems to be a Texas law that may actually violate federal laws, but I'm not a lawyer.

RE: Ummm...
By PCMerlin on 4/12/2013 1:12:14 PM , Rating: 2
Except that this is intra-state commerce (sales within the state). Anyone in Texas is still free to cross state lines, purchase a Tesla and bring it back, so there is no prohibition of inter-state (across state lines) commerce.

This law only affects sales made within the state of Texas. Many other states have similar, if not even more restrictive laws regarding automobile sales.

RE: Ummm...
By quiksilvr on 4/11/2013 3:18:43 PM , Rating: 3
Giving in to asinine rules just because its "the law" is a very poor way to move society forward.

Tesla is trying to remove a middle man/place that is clearly there just so the state/the workers can collect more baseless taxes/wages and justify their existence.

I say fight the law and give the little guy a chance.

RE: Ummm...
By tng on 4/11/2013 3:53:21 PM , Rating: 2
Are the dealerships owned by Tesla? This just could be a way to cut the cost of a product that has a limited market segment and basically sells itself. Why have a markup for the employees and rent when it can just be dropped off by truck at your door?

People that buy these obviously have the means to travel to see one and it is not like there is a dozen EV dealerships in the area, so why would he want to open one?

RE: Ummm...
By Reclaimer77 on 4/11/2013 5:33:46 PM , Rating: 2
And I find it highly ironic that it's a democratic lawmaker pushing for deregulation :-)

Considering he's from Texas, not so much. If he was your typical Liberal, he wouldn't have got elected.

I see the big deal here... "big government", overregulation, take your pick

Yup, got it in one :D

RE: Ummm...
By topkill on 4/11/2013 9:41:27 PM , Rating: 2
Bingo, on both counts!!!

Texas is different, even for Democrats and this whole set of laws (they exist in virtually every state) are WAY TOO MUCH GOVERNMENT!!!

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins

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