Why Can't Tesla Sell Cars in Texas?
May 2015 - What do you mean, Tesla can't sell cars in Texas! That can't be true, can it? With extreme conservatives firmly entrenched in the Texas legislature and statehouse, you wouldn't expect that their "free market" rhetoric would allow the state to keep Tesla from selling cars in Texas, would you?
For the most part, that's the case, though. And the same holds true in a few other states as well. Here's some of the detail behind this story:
 (Tesla Model S - image from nydailynews.com)
If you haven't read much about Tesla Motors in recent years, you may not realize that Tesla has adopted a direct sales approach in selling to consumers. This means that Tesla has decided to sell only through Tesla-owned dealerships or via the internet.
Tesla does not use third-party dealers, as the rest of the automobile industry does.
Ok, so what's the problem, you ask? Simple: a number of states, including Texas, have laws on their books that require autos to be sold through third-party dealerships only, i.e. dealerships that are not owned by the automobile manufacturer. We're not sure about the history of these laws; we suspect the rationale was to try and increase competition in order to keep prices lower for the consumer.
Which is not a bad idea, but it probably should be modified to allow for a regulated direct sales approach as well.
One thing we can tell you, though, is that the automotive dealers are spending a lot of money to keep these old laws on the books and to force Tesla to sell their cars through third-party dealers. And for the moment, at least, it's working.
The so-called "free market" conservatives in Texas don't seem to care about free markets when the folks who bankroll their campaigns tell them to vote the other way.
Or, to be fair, in the case of Texas the Republican leadership in the legislature just makes sure any bill to change the law never gets out of committee for a final floor vote - that way these conservatives don't have to go on record with an actual vote that shows their hypocrisy.
 (Texas House Chamber - image from cbslocal.com)
But we shouldn't be surprised by this. When there is enough money on one side of an issue, too many politicians are not willing to stand up for principle or what's best for the jurisdiction they represent. So unless the Supreme Court reverses itself and stops allowing unlimited money in political campaigns, the rich and powerful will continue to buy our elected officials. (Therefore,
we encourage you to vote for politicians who support limitations on campaign contributions. Believe it or not, such folks do exist in both parties.)
For the time being then, if you live in Texas and want to purchase a Tesla, you'll have to do it out of state or via the internet. There still is no law on the books to keep you from bringing a Tesla into Texas; you just can't buy it at a Texas dealership.
By the way, while New Jersey had auto dealership statutes on the books similar to those in Texas, the state Assembly in Trenton (with Democratic majorities in both houses) passed a law in 2014 to allow for Tesla's direct sales model in New Jersey. After initially being opposed to this change, the bill was signed by Governor Chris Christie.
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