Despite Tesla’s recent success paying off it’s loans ten years ahead of schedule, they could be facing a new challenge – namely the inability to sell their electric cars directly in Texas.
All automotive companies are forced to go through a huge dealership network – and trying to take any other route is downright illegal. This would be a reasonable request for powerful, well-established companies, but a slightly taller task for the startups like Tesla.
Tesla’s showrooms are owned and operated by the company. Most are in shopping malls, with only enough cars on hand for display and test drives. Every Tesla car sells at full sticker price, and service on the cars is performed at separate garages owned by Tesla. This is in stark contrast to the methods used by other manufacturers such as Ford, who sell to dealerships, which then go on to negotiate a final prices with customers.
The company lobbied state politicians and a bill that would have cleared the way was submitted to the legislature, but didn’t quite make it to a vote. It was a move fiercely opposed by the Texas Automobile Dealers Association, who are unlikely to want any exceptions being made, even if Tesla is aiming to improve the environment in the process of selling their wares. Some have even raised the question of whether a dealership network actually adds any value to the process of selling cars in the state.
Since the bill that would allow Tesla to sell electric cars directly in Texas failed to make it to the floor of the Texas House or Senate for voting, before the regular session came to a close on May 27, Tesla won’t have another chance before the Legislature meets again in 2015. There is the possibility they will lobby to Federal Court but that remains to be seen.
Do you think the dealership networks add any value to selling cars? Do you think Tesla should be allowed to sell electric cars directly in Texas?
Image via Tesla