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Tesla messes with Texas, over how to sell its electric cars

Written on:April 10, 2013
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Tesla’s CEO Elon Musk spoke in Austin at the Texas Capitol on Wednesday morning, calling for support of a bill that would make it legal for Tesla to sell its electric cars directly to the public from its own stores. Texas (like some other states) has franchise laws that forbid automakers from operating their own dealerships.

Tesla wrote in a statement:

Electric vehicles simply cannot be sold side by side with gas vehicles because they will always be a minority item in terms of sales and service volume. Existing franchise dealers have an inherent conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars.

Tesla’s resistance to the Texas Automobile Dealers Association reminds me of some of the newer transportation companies like Uber, Relay Rides, SideCar and Lyft are facing policy and legal opposition in some cities and states. Per usual, technology and business innovation is moving faster than policy can keep up with it.

Tesla Model S

Tesla already has two “stores” in Texas where they can show off the cars, but can’t talk about pricing and can’t actually sell anything directly to customers. And in true Tesla and Elon Musk competitive style, the new bill is pretty narrow specific for a company like Tesla. House Bill 3351/Senate Bill 1659, which was filed by Senator Craig Estes (R-Wichita Falls) and Representative Eddie Rodriguez (D-Austin), permits U.S.-based companies that make 100 percent electric cars (so no hybrids) to sell directly to customers. Tesla says it’s narrow so it affects the dealers as little as possible.

Tesla has been innovating around its stores since it launched the first one years ago. The company hired George Blankenship to lead the store experience, and Blankenship previously helped design Apple’s store experience. Here’s my interview with Blankenship at our RoadMap event November 2012 (RoadMap 2013 info is here).

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