Texas State Senator Kelly Hancock (R-North Richland Hills) introduced a bill to allow Tesla Motors to directly sell vehicles to consumers. The bill would allow the automaker to bypass franchise dealerships they consider to be an unnecessary middleman. The Texas House introduced an identical companion bill.
Hancock was joined by State Reps. Charles “Doc” Anderson (R-Waco), Eddie Rodriguez (D-Austin), Jodie Laubenberg (R-Parker), Ron Simmons (R-Carrolton) and Tan Parker (R-Flower Mound), according to Scott Braddock with the Quorum Report. Two bills will now attempt to work their way through the Legislature and will likely face opposition from the Texas Automobile Dealers Association (TADA). They House will work on HB-1653 while the Senate moves its identical companion bill, SB-639. If both bills pass, a conference committee will work out any details that differ because of amendments.
Currently, Texas law only allows consumers to purchase new vehicles from someone holding a “franchised dealer’s license.” The bill would allow Tesla to operate twelve dealerships in Texas but would protect franchise dealers by restricting the direct sales to manufacturer’s lines that have never been sold in the state through a franchised dealer.
Rep. Rodriguez hopes that limiting the number of direct-to-consumer dealerships for companies like Tesla, the bill might be able to pass. During the last session he attempted to pass a similar bill that capped the number of cars that could be sold through this business model to 5,000. “Our current franchise dealership laws were created to prevent vehicle manufacturers from unfairly competing with their existing franchised dealerships, not to restrict competition,” Rodriguez said in a statement, according to the San Antonio Express.
Not unexpectedly, the TADA disagrees. “No matter how many outlets they ask for it’s still a monopoly,” said TADA president Bill Wolters. “Tesla,” he said, “is a pure monopoly.”
Texas is currently one of only five states that does not allow direct-to-consumer sales of new cars by manufacturers. That issue is one of the reasons why Tesla eliminated Texas as a site for a $5 billion factory to build the cars batteries.
Bob Price is a senior political news contributor for Breitbart Texas and a member of the original Breitbart Texas team. Follow him on Twitter @BobPriceBBTX.