We love us some sweet, sweet freedom down here in Texas, unless that freedom involves selling your car directly to your customers without having to go through a dealership. Our laws aren't big on that kind of freedom, and the last time the Texas Legislature met, Tesla Motors was way outgunned in the direct sales fight. Things could be different this time.
The Texas Tribune reports today that while some Texas dealers have reached out to Tesla for franchising options, the company is saying "no thanks" and is gearing up to spend big bucks on lobbyists for the current legislative session to hopefully change the laws that restrict direct sales.
Two years ago in Texas, Tesla spent between $170,000 and $370,000 on nine lobbyists. This time they're spending between $625,000 and $1.18 million on 21 lobbyists, including prominent lobbying figures that include confidants and staffers of former Gov. Rick Perry and a former senior policy adviser for the Speaker of the Texas House, the Tribune and San Antonio Express-News report.
In case you've been living under a rock for the last three years, Tesla sells its cars directly, without a dealer acting as middleman like they do in nearly every other new car sale. Many states, including Texas, have laws that protect this system, thanks to decades of dealership lobbying.
Elon Musk is against the dealership franchise for several reasons, including the fact that franchise sales of electric cars from startup companies have historically always failed. He also fears dealers will emphasize selling their gasoline-powered cars over Teslas, or won't even want to sell them because they won't make much money off Tesla maintenance. (Musk maintains that his engine-less electric car doesn't need much maintenance; I say we'll see about that.)
In 2013 (the Texas Legislature meets only every other year) Tesla got two bills introduced in the State House and Senate aimed at letting them sell cars directly, but the session ended that summer without a vote on either. Tesla was handily outspent by the dealers and their political action committees.
No lawmaker has proposed a bill for the 2015 session yet, the Tribune reports. But Rep. Eddie Rodriguez, a Democrat from Austin who authored the 2013 pro-Tesla bill that allowed for direct sales if cars are 100 percent electric, said he's working on something similar this time. Here's what he said:
"I kind of sense this move towards more freedom to buy things you want to buy, how you want to buy them," he said. "It is a new kind of technology, and they have a business model that's very 21st century. Maybe we need to look at this thing a little differently."
Another House member, Dallas Republican Rep. Jason Villalba, proposed a "middle ground" bill in 2013 that would have allotted 5,000 direct sales of electric cars per year before a company had to franchise with dealers. This time, he said he won't propose legislation without some concessions for dealers, the Tribune report said.
But Elon Musk seems adamant about not wanting to go that route, at least for now. Speaking in Texas in January, Musk said he might be willing to franchise in the far future only if it made sense for Tesla as it expanded. But "anyone who's been a huge jerk to us" won't get to join the party, he said.
I've pointed out before that supposedly pro-free market Texas' approach to Tesla is hypocritical and protectionist. But since Texas isn't alone in protecting dealers at the expense of newcomers, it looks like Tesla will have to wage this fight on a state-by-state basis after all.
This time, though, they seem to be prepared for the fight.