Pro-Tesla Legislation Falls Flat in Texas

Tesla Motors, the electric car company founded by Elon Musk, is making headlines whether they are winning or losing legal and legislative challenges. Most recently, it was the latter. Tesla just lost out on an opportunity to change dealer franchise laws in the state of Texas.

With the power to lobbyists, Tesla Motors hoped that two bills in the state legislature would help the organization sell directly-to-consumers in the Lone Star state. However, neither of the bills made it to House or Senate floors for a vote. Now that the legislature has concluded (June 1), Tesla is currently out of luck for this legislative session. The next regular legislative session in Texas won’t occur till 2017. As expected, the response from Tesla Motors is dissatisfaction with this occurrence.

Diarmuid O’Connell, vice president of business development for Tesla told Bloomberg he finds this outcome disturbing. O’Connell told Bloomberg, “They are thwarting the will of the people. That it (legislation) doesn’t even get a fair hearing — much less a vote — is to me very odd and disturbing.”

Tesla would like to sell it’s electric vehicles directly to consumers and specifically bypass dealerships. In Texas, the state that is home to the nation’s second largest car market, this effort by Tesla is seen as a “joke.” At least it’s laughable according to Red McCombs. The billionaire founder of Red McCoombs Automotive, the oldest and largest dealer group in Texas. In an interview with Bloomberg McCoombs said, “It’s kind of a joke to think that somebody’s going to come in here and ride in on a horse that doesn’t use gasoline and change the world. They’re going to have to play by the same rules that the competition plays by.”

While for the time being Tesla won’t be able to sell directly to consumers in Texas, O’Connell wants Texas to remember the impact of their decision. Tesla Motors is planning to create an electric pickup at some point in the future. Texas is seen a great choice for making a truck, however, in the same Bloomberg interview, O’Connell noted that the decision would come down to what is “logical.” O’Connell told Bloomberg, “When we do a pickup, it would be logical that we would do it in Texas. It’s also logical to ask why would we invest major amounts of money in a state where we can’t even do business.”