They’ve brought more firepower to the fight this time, by which I mean “more lobbyists”, but we’ll see if they can break through.
Let the car haggling resume at the Texas Capitol.
A group of state lawmakers on Thursday filed legislation that would allow Tesla Motors to sell its luxury electric cars at as many as 12 stores in Texas, renewing the California-based company’s challenge to a state law protecting auto dealers.
Tesla’s business model is to sell directly to consumers, bypassing the middleman dealers as it does in many states. But a longstanding law bars that practice in Texas.
New legislation — House Bill 1653 and its companion, Senate Bill 639 — would allow manufacturers that have never sold their cars through independent dealerships in Texas to operate the limited number of stores. It’s modeled on deals Tesla has forged in other states, including New York, Ohio and Pennsylvania.
“Free market principles are the foundation of our strong Texas economy,” said state Sen. Kelly Hancock, R-North Richland Hills, who filed the Senate bill. “SB 639 helps sustain a competitive marketplace and gives consumers more choices.”
State Rep. Eddie Rodriguez, D-Austin filed the House bill, along with with Reps. Charles “Doc” Anderson, R-Waco; Jodie Laubenberg, R-Parker; Tan Parker, R-Flower Mound; and Ron Simmons, R-Carrollton.
Tesla currently showcases vehicles at “galleries” in Austin, Dallas and Houston, but because the galleries are not franchised dealerships, state law prohibits employees from discussing the price or any logistical aspect of acquiring the car.
Tesla calls the traditional dealership model unworkable, because it doesn’t mass-produce its cars — at least not yet. The company allows customers to order customized cars that it later delivers, and it can’t depend on independent dealers to champion its new technology, it says.
“Fundamentally, this company was founded to produce a new technology,” Diarmuid O’Connell, vice president of business development, said in an interview. “No one is as unconflicted as we are in our desire to promote electric vehicles.”
Some Texas dealers have approached Tesla about selling its cars, O’Connell said, and the company has “respectfully declined.”
Tesla and others have also questioned whether a traditional dealer could succeed in selling its cars, because dealerships make much of their money on maintenance — something the company’s highly touted models require little of.
O’Connell said the legislation would let Tesla employees educate Texans about its cars in person, allowing the company to grow its footprint here. He envisions adding stores in Corpus Christi, San Antonio, El Paso, Fort Worth and San Antonio, if given permission.
See here for previous Tesla blogging. The Trib also had an interesting story about the auto dealers’ attempt to get Tesla to work with them; some of that is recapitulated in the story above, but it’s worth reading on its own. Tesla insists that their model doesn’t work with dealerships, though I get a whiff of “the lady doth protest too much” in their argument. I’ve compared Tesla’s efforts to the microbreweries more than once, and one of the things that characterized that saga was that in the end they didn’t get everything they wanted. They scaled their wish list back to the point where they were able to minimize opposition from the big brewers and the distributors, and from there the task became doable. It would not surprise me if in the end Tesla needs to find some form of accommodation with the auto dealers.