Tesla Motors is no stranger to resistance from state dealer associations, which oppose the electric carmaker’s approach to factory outlets. The best-documented standoff has been between Tesla and the Massachusetts Dealer Association, but legal or legislative battles are unfolding in several states. The latest state dealer association the company faces is the Texas Automobile Dealers Association, according to Automotive News.
Tesla’s vice president of business development, Diarmuid O’Connell has one of the nation’s highest barriers to operating a factory-owned store. Tesla currently operates two “galleries” in Austin and Houston, but in order to comply with state franchise law, representatives cannot initiate or complete a sales transaction or deliver a vehicle on-site. Customers should contact a representative in California to complete the sale transaction, as well as to arrange their own transportation and delivery arrangements. Even in the area of service and warranty work, inquiries must be routed through California, which then subcontracts the work to service centers in Texas.
To tackle Goldberg’s twisted bypasses to sell and service vehicles in the state, Tesla backs a bill from the Texas legislature that would change the state’s inflexible franchise laws to make it easier for dealers to operate. and factory-owned service centers. But the state dealership association has actively lobbied lawmakers and participated in hearings, saying the traditional franchise model is the best way to sell and service vehicles. The association predicts the failure of Tesla-sponsored legislation that would allow them to operate, calling Tesla’s request for exemption from the existing franchise law “arrogant.”
Tesla continues to fight the Massachusetts Dealer Association with a bill that would change the state’s franchise law. The state dealers association is backing its own bill thwarting Tesla’s efforts. The only bright spot for Tesla in recent times has been Minnesota, where the state dealership association temporarily suspended its pursuit of franchise laws that would have prevented Tesla from opening retail outlets in the ‘State.