Tesla is seeking for less strict regulations in Texas so that the company can sell their electric cars directly over the Internet, compared to having to go through car dealerships.
While Tesla passed on choosing Texas as the site of its planned $5 billion battery factory, to be allowed to sell vehicles directly to Texans, Tesla is promising future investments into the state in return.
Tesla doesn't use franchised dealerships or outside salesman for car sales, as the company says that these traditional channels are primarily invested in selling gas-powered cars. However, sales by car companies are not allowed in Texas, and it has certain restrictions across many states for sales of new vehicles.
Proposals for direct car sales within Texas were discontinued in the legislative session in 2013. However, Tesla is looking to have the issue jump started when the lawmakers return to work in January.
"We're not asking to blow up the franchise dealer system," said Tesla VP for business development Diarmuid O'Connell. "We are looking for a narrow and reasonable window to be able to promote this new technology ourselves."
Only a few members of the legislature have shown public support for the idea of allowing direct car sales. However, back in March, outgoing Gov. Rick Perry said that the laws of the state were "antiquated" and that Texas should already talk about issues such as the one that Tesla is pursuing.
However, Perry's statements were back when Texas was among four states to be the site of Tesla's $5 billion battery factory. Tesla decided to construct the factory in Nevada.
An op-ed signed by four professors in economics and law from universities in Texas was published in the Austin American Statesman, with a longer letter signed by the same professors along with three others were sent to the members of the legislature. The professors called for the lawmakers to "modernize" the regulations for vehicle distribution, as the existing laws are hurting competition through "protectionism for auto dealers."
Robert Brazie, a lobbyist for the Texas Automobile Dealers Association, believes that bills seeking for the approval of direct car sales in Texas will not gain sufficient support. Brazie also said that Tesla's offer to pour future investments into Texas carries little weight because of the company's decision to put up its new battery factory elsewhere.
O'Connell admitted that it would be difficult to have the current laws on direct car sales overturned, especially since the proceedings will be further complicated by Tesla's decision to put up their batter factory in Nevada.
Five states have banned the direct sales strategy of Tesla, namely Texas, New Jersey, Arizona, Maryland and Michigan. While Tesla said that it has worked with legislatures to prevent such bans elsewhere, Texas is a very significant market.
Tesla said that there will be 1.5 million deliveries of new cars in Texas this year, which is almost 10 percent of all new vehicles sales all over the country.
