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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: 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.


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