Tesla to lobby for direct sales to Texas Lawmakers
AUSTIN, Texas - Automaker Tesla hopes to get a decades-old law changed here in Texas.
Starting Thursday, the electric car company is mounting a campaign to sell direct to consumers, something franchises across the state hope won't happen.
Two years ago, the company tried but failed to get this law changed.
They hope this session brings a different outcome. Right now, because of its price tag, only a handful of people can afford the luxury sports car.
They hope to change that in the next few years and that says car dealers across Texas is why they'll spend the next few months fighting to keep it on the books.
"The majority of states make it very possible for us to sell direct - we already sell in 20 different states and that number is growing," said Diarmuid O'Connell, VP of Business Development at Tesla.
The company mounted a campaign to quash the law two years ago but the bill never made it to the floor. They say it was introduced too close to the deadline. Tesla will take that law on again this legislative session.
"What you have in Texas is a monopoly of retailers who have the opportunity to essentially extract and extra increment out of the customer," O'Connell says.
Critics like the Texas Automobile Dealers Association say selling direct to customers will be robbing the state of valuable income and would be a blow to the more than twelve hundred and fifty franchises across Texas.
"If the manufacturers can control the retail, if it was factory direct sales then we probably wouldn't have half as many dealerships as we have today because the manufacturers would not want to make the investment in the rural markets," said Bill Wolters, President of the Texas Automobile Dealers Association.
But O'Connell fights back.
"If you open up this distribution, you are going to see more competition purely whether it's manufacturer owned stores or dealer owned stores," he said.
That Tesla believes will ultimately benefit the consumer and Texas for many decades to come
"As our market grows here, we a going to be employing more people and when we do that second gigs factory it will almost be obvious that we should do that here," O'Connell explains.
Tesla's CEO Elon Musk is scheduled to give a keynote speech at the TxDOT Forum Thursday.
Afterwards he'll be at the Capitol for an owners rally then he's expected meet with legislators. It's safe to say that both sides are gearing up for a pretty good fight.