Will Dealership Laws Change For Tesla In Texas?

Tesla Motors has made headlines in 2014 for innovation as well as legal battles. The California-based electric car company decided in early September that they would build their $5 billion dollar Gigafactory near Reno, Nevada. This facility is meant to lower the cost of their lithium-ion batteries. During their effort to build a gargantuan battery plant, Tesla also took part in legal battles over their direct-to-consumer sales model. Across the nation, dealership associations fought Tesla over their ability to sell vehicles without the use of franchised dealerships. Tesla is a flashy brand, which commands the attention of the news media. The lawsuits, which they encountered often, ended up being a public relations battle. Tesla was painted as the green energy company, which is saving the planet. On the other side, dealers were depicted as being part of a good old boys network, anxious to extinguish Tesla for not wanting to play by their rules.

One of the states in which Tesla wants to sell direct-to-consumer using their Apple-store like factory model, is Texas. The lone star state currently outlaws Tesla from selling direct-to-consumer using their gallery stores. However, Tesla is still pushing for that opportunity. On this subject, Diarmuid O’Connell, Tesla’s Vice President for Business Development has been quoted as saying, “We’re not asking to blow up the franchise dealer system. We are looking for a narrow and reasonable window to be able to promote this new technology ourselves.” There isn’t a lot of lawmaker support in Texas for Tesla, however Elon Musk’s organization did make an impact on Texas Governor Rick Perry. Perry was a visible part of the attempt on behalf of the state to incentivize Tesla to build their Gigafactory in Texas. In an interview with Fox News Gov. Perry spoke about his desire for a conversation about dealership laws in Texas. Speaking about dealer franchise laws he said that he supports the notion that an individual can, “directly compete for the price of that car, negotiate…from the manufacturer. I think that the time has come for the country to have that conversation. I can assure you that they’re going to have it in Texas.”

Time will tell whether or not the dealership franchise laws change in Texas, however, the support of outgoing Governor Rick Perry, could get that discussion underway. Do you think that Texas will change their laws for Tesla? Do you think that Tesla will eventually sell using franchised dealers?