Tesla Can’t Sell Directly to Consumers in Texas

AUSTIN, Texas — Two Texas bills that could have allowed Tesla to sell directly to consumers did not make it to the voting round this past week. The bills, SB 1659, authored by Sen. Craig Estes (R-Wichita Falls) and HB 3351, championed by Rep. Eddie Rodriguez (D-Austin), were introduced in March to create an exception for Tesla Motors’ retail model in the state.

The pair of bills was written to exempt American-owned manufacturers who exclusively make electric vehicles from existing law, which requires manufacturers to sell vehicles through authorized franchised dealers.

The state’s legislative session ended on May 27. Since lawmaker chose not to vote on the bills, Tesla’s Austin and Houston galleries will only be allowed to display vehicles. Employees are also prohibited from disclosing the price or specific details of vehicles.

Texas Automobile Dealers Association General Counsel Karen Phillips equates Tesla’s retail model in Texas to an automobile show. “If they’re not selling, that’s not a violation of the [existing] statute,” she says.

“The legislature did the right thing,” she added. “The franchise system is the optimum way for customers to purchase and service their vehicles.”

A Tesla spokesperson declined to comment for this article.

Tesla’s retail model was rejected in late April by lawmakers in Virginia, and North Carolina legislators await the governor’s decision on a proposed bill that would ban Internet car sales — a proposition that would halt sales in the state for Tesla if passed.

—    Stephanie Forshee