Tesla current owners are wanting change in the state of Texas and especially Elon Musk wants this change to happen as well. Musk became aware of the issue when a local owner posted this on twitter and tagged Elon Musk.
According to a beginners guide to the Texas legislature, at the end of the civil war, Texans were rewriting the state constitution and it was made very clear they hated government. The old joke goes that they wanted to have the state legislature meet for 2 days every 140 years. they had to settle for 140 days meeting every two years. As such the state house and senate members get paid their yearly salary, but only work 140 years every two years for this salary. The house is made up of 150 members serving a 2 year term. The Senate is made up of 31 members serving a 4 year term.
Texas also still has what is called the Blue laws, a set of laws that came into existence during prohibition and has been added to over the years so that the state has every other county dry, you can only buy auto's, meat, liquor on specific days, etc. All this adds to a confusion for people who come to the state of Texas to live and or work and need to buy items such as an Auto.
Now that you have a basic understanding of the political structure in Texas. No this is not a political discuss, but one focused on the challenges Tesla will have selling auto's.
Gigafactory Texas is in Austin Texas and as such the local house and senate members presented this working bi-annual 140 day session bill H.B. #4379.
These representatives of the area that Tesla is building a new manufacturing site that will build semi trucks, trucks and suvs on electrical battery platforms wanted to add the following to state law:
| (2) is a manufacturer or distributor described by | ||
| Section 2301.476(i-1) or is a bona fide employee of the | ||
| manufacturer or distributor. | ||
| SECTION 2. Section 2301.476, Occupations Code, is amended | ||
| by adding Subsection (i-1) to read as follows: | ||
| (i-1) Notwithstanding any other provision of this chapter, | ||
| a manufacturer or distributor may own or operate a dealership, may | ||
| own, operate, or otherwise act in the capacity of a dealer, and may | ||
| obtain a dealer general distinguishing number if: | ||
| (1) the manufacturer or distributor manufactures or | ||
| distributes motor vehicles powered only by electricity or battery; | ||
| and | ||
| (2) the manufacturer's line-make has never been sold | ||
| in this state through an independent franchised new motor vehicle | ||
| dealership. | ||
| H) manufacturer or distributor described by | ||
| Section 2301.476(i-1), Occupations Code. | ||
Tesla's company-owned outlets cannot legally sell and or deliver an auto in Texas if bought by a state citizen. The so called galleries are open to the public where one can go to review the auto's Tesla makes and discuss questions with staff about Tesla auto's, but no pricing is allowed to be discussed or how one would go about buying a Tesla auto.
On the other hand, any citizen of Texas can go online and order a tesla from their web site. The process is a very convoluted process as no order is allowed to be processed within Texas or any Texas facility owned by Tesla.
So how does one purchase a Tesla in the state of Texas?
Per multiple postings from Tesla owners in Texas, their paperwork was FedExed to them from Tesla Gallery stores in other states such as Nevada, Colorado, etc. Once they received their paper work, they had to sign everything and send it back to the gallery store that is processing their order. The buyer then has to pay for the auto online, which must be done outside of the facility grounds in advance. The newly purchased vehicle is then shipped to one of Tesla's eight Texas Service Centers where the owner can then pick up their auto as an existing owner. At this point, Texas is very happy to then collect Sales Tax and register the auto that the owner will have to do themselves either at the local DMV or online.
Tesla has moved ahead since they anounced in July 2020 that they had choosen Austin Texas for their newest assembly plant and will be employing an estimated 5,000 people.
According to the details per thedrive.com story, representatives introduced H.B. 4379 on March 12th 2021, two months later it was reviewed by the house transportation committee on May 11th 2021 being a win for the Austin representatives. Yet this is where it turns sad for Tesla as a company dropping Billions into the state had no handshake, no deal, etc. about allowing them to sell direct. The seven step process of presenting a bill, reviewing a bill, voting on the bill, negotiating the changes between house and senate and all the other steps must be done within the 140 day session. As such, the 2021 legislation session came to a close with the bill not getting out of the committee and moving forward and as such, must be taken up again in 2023 legislation session. Stalled before it could even get off the start line.
For Decades the Dealer association has been very protective of their turf and spent considerable time and money lobbying the politicians and won this round. Cody Harris the local representative who presented the bill says that he still considers it a win due to the fact that it was presented before the members and as such, will help to open the eyes of the politicians about needed changes to the way auto's are sold.
President of the Dealer association says it is all about protecting the buyers as to why it is illegal for Tesla to sell direct.
QUOTE:
Illegal for Tesla to sell vehicles to them:
- Tesla owners would be left helpless if the company failed, closing its service centers—whereas dealerships service cars even if they’re no longer made;
- Tesla has better things on which to spend its capital than brick-and-mortar stores and service centers (an interesting assessment for a state dealer lobby, but whatever); and
- The good reputation of all auto dealers would be deeply damaged if Tesla were to fail, leaving their owners high and dry.
So one can make their own assessment if you agree with or disagree with the Dealer Association about Tesla selling direct.
So how will Tesla which has stated they plan to start production of the Tesla Y and Cybertruck in 2021 sell their auto's in Texas home of their production?
End result is that Tesla will have to build their auto's and ship them out of state to other states where the gallery store will take possession of the auto. Sell the auto online to the Texas citizen, handle all the paperwork via FedEx or UPS and payment online, then reship the auto to Texas gallery store for pickup.
So what do you think about this and is it fair to Tesla, the citizens of Texas and the future of direct auto sales?
Texas House of Representatives - About Us
A Beginner’s Guide To The Texas Legislature – Houston Public Media
Do 'blue laws' still exist in the Lone Star State? Curious Texas investigates (dallasnews.com)
87(R) HB 4379 - Introduced version - Bill Text (texas.gov)
Tesla Will Have to Ship Its Texas-Built Cars Out of State to Sell Back to Residents (thedrive.com)
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