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Tesla makes progress in Texas, GOP endorses direct car sales


During a convention held in Dallas last week, Texas state GOP delegates endorsed new Tesla-backed language in the party platform to allow direct sales of vehicles in the state. About 90 percent of the more than 8,000 delegates supported the new proposal.

This new support is likely to be a big help for Tesla’s next effort to push new legislation in order to sell its cars through company-owned stores in Texas – something the company has been trying to do since 2013.

Tesla had a booth at the convention and discussed its situation in the state with thousands of delegates.

Under the current state’s laws governing car sales, as an automaker, Tesla cannot sell its vehicles to consumers and is required to go through third-party dealerships – something the company refused to do as per its business model.

In order to bypass the system, Tesla uses what it calls “galleries” instead of stores or dealerships. To comply with state laws, Tesla employees at those galleries, which are located in Dallas, Houston and Austin, can show the cars to potential customers and educate them on Tesla’s offering and electric vehicles in general, but they cannot discuss pricing or take an order.

Customers have to go through Tesla’s website to order any vehicle and the sale and delivery is handled through Tesla in California, where the vehicles are also registered. The automaker uses similar systems in other states with similar direct sale restrictions.

David White, Tesla’s Texas spokesman who was in charge of the booth at the convention, called for the end of the restrictions via Dallas News:

“If Texas is truly ‘wide open’ for business, our elected officials should take the appropriate steps to end these frivolous regulations in 2017,”

While a vast majority of the delegates agreed with White’s message, some were adamant that the party’s platform should keep the ban on direct car sales. Though it seems those in favor of the ban had personal interests in dealerships keeping their monopoly on car sales. Dallas News reports:

Platform committee members rejected pleas by two prominent figures in the state GOP — U.S. Rep. Roger Williams of Weatherford and former Republican national committeeman Bill Crocker of Austin – that they remove the call for direct car sales. Williams is a car dealer, and Crocker is a lawyer who represents car dealers.

The official support of the state GOP is good news for potential Tesla customers in Texas, but it’s still far from a done deal. Gov. Greg Abbott still needs to be convinced. Last year, Abbott advocated for the status quo on the state’s ban of Tesla’s direct sale method.

Car dealers are also ready to fight for their monopoly again. B.J. “Red” McCombs, a car dealer from San Antonio, said the current state ban on direct sale is “as sacred as Paul’s letter to the Corinthians.”

Rob Braziel, Vice President of the Texas car dealers’ lobbying group, said that his organization will keep fighting for the ban:

“Texas legislators have gotten this right time and time again that current Texas franchise auto dealer laws ensure competition and protect consumers,” he said.

It will be an interesting battle and one of many for Tesla after Utah, ConnecticutMichiganIndiana and North Carolina. In the meantime, Tesla’s service calls to its 4 service centers in Texas will still need to be routed through its California offices and the automaker needs a special permit every time it wants to offer test drives to potential customers.


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