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  • G. David Felt
    G. David Felt

    Musk loves Texas (No Income Tax), Texas Loves Tesla, Maybe!

      Texas has many old laws, Tesla is a 21st century company wanting to continue to move forward into the future. Selling auto's in Texas is going to be a challenge as sadly, some of the old guard are not wanting to see change happen, the dealership association of Texas is winning for now. So how will Tesla sell their EVs in Texas?

    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;
                   (2)  the manufacturer's line-make has never been sold
      in this state through an independent franchised new motor vehicle
    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.


    Illegal for Tesla to sell vehicles to them:

    1. 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;
    2. 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
    3. 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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    Elon will probably lobby them, he has more money than the dealer association.  But I imagine people will have no problem buying online, they can test drive the car online, then just buy online like people buy everything else online.  The Dealer Associations are almost like suburban shopping malls trying to compete with Amazon, they can make up whatever excuses they want, but their spend 5 hours at the dealership to buy a car is an out dated model.

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    >>Oh; and how does one “drive a vehicle online”??<<


        This would be an answer of some sort, I guess...


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    Add some accessories



    Maybe a VR set to make things a tad more 'realistic'

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    And looksie here, he could even test drive the very 'first'  automobile he so thinks it is...

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    On 6/1/2021 at 8:51 PM, balthazar said:

    How’d you come up with “5 hours”?? ?

    Oh; and how does one “drive a vehicle online”?? ?‍♀️

    You take a test drive at one oof their stores or demo places.  Then go home  and order online.

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    21 hours ago, smk4565 said:

    You take a test drive at one oof their stores or demo places.  Then go home  and order online.

    Not in Texas apparently lol.

    On 6/1/2021 at 7:25 PM, smk4565 said:

    but their spend 5 hours at the dealership to buy a car is an out dated model.

    I have bought ten cars form dealerships and have never been in one more than two hours tops. Please stop with the exaggeration. 


    And again, Elon has stock. He does not billions of his own money to compete with dealer Association.


    Having said that, this is dumb to a whole other level. Texas is about 100 years behind the times here but then again, Texas.

    Edited by surreal1272
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    I e-mailed my sales dude a couple of times; no responses. But dealer is less than 2 miles up the road from me, and every time I stopped in, he was there, and the service was immediate & great. 

    Why would you go to a Tesla store, test-drive a model, then say 'OK, bye!', drive back home to sit at your laptop, creating accounts and passwords, logging in, clicking thru 2 dozen links to 'e-sign' everything, HOPING all the forms & numbers were right, having no one to ask any questions of... why— just so you could be near your own toilet? I don't get it; you were RIGHT THERE at the store, just buy it RIGHT THERE.

    I told my sales dude 'no dealer ID sticker on the truck'. He said 'no problem'. When I went to pick it up, the sticker was on there, NBD; I mentioned it, it was right outside the detail bays and they took care of it in seconds. If I bought it online & say it got delivered... there'd the unwanted sticker would be and I'd have to drive back to the Tesla store.

    I mentioned paying full MSRP, right? Is it really worth thousands and thousands of dollars to avoid an hour at the dealership? What are you doing buying a shitty Tesla if you have that kind of money to waste? 

    Screen Shot 2021-06-03 at 8.53.58 PM.png

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    I love how Dealer Associations say the dealer model is so great and the direct sales model is so terrible, so you need laws to stop direct sales.  If they weren't afraid of direct sales or afraid of Tesla (or Lucid or Rivian, or whatever Chinese car company comes here) then why do they always talk about it?  If the dealer model was so strong, they should welcome the competition.  If the dealer model was so great, then the dealers should lobby the state gov't to allow Tesla to sell direct and compete with them head on to prove their point.

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    It has nothing to do with what the Dealer Association says.

    There's very tangible reasons to have dealer franchises. First is; once a manufacturer becomes a volume one, it reduces the OEM's workload/overhead, but more importantly, it fosters competition. Once a manufacturer handles ALL sales directly, there's no more price competition to benefit the consumer. No competing dealers, just one, full, factory MSRP price. 

    I read Tesla has raised its prices 5 times this year already. 

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