About 90% of more than 8,000 Texas-based GOP delegates vote in favor of the direct-sales proposal
Tesla Motors Inc. (NASDAQ:TSLA) has been unsuccessful in gaining support from state regulators in Texas since 2013, as the lobby group of Texas Automobile Dealers Association (TADA) keeps overpowering Tesla representatives time and again. However, the electric vehicle (EV) maker has made some progress this year, following overwhelming support from the Republican Party over the direct-sales matter.
The Dallas Morning News reported recently that the Texas state GOP convention delegates endorsed Tesla for selling its vehicles directly to consumers, as roughly 90% of over 8,000 delegates voted in favor of the Tesla-backed language. In fact, the committee members rejected appeals by two key state GOP officials: former Republican national committeeman, Bill Crocker (D-Austin), and Rep. Roger Williams (D-Weatherford), who wanted the delegates to remove the proposal. While Mr. William is a car dealer, Mr. Crocker is a lawyer for car dealers.
At the convention, the company had a booth where it discussed its situation in Texas with the delegates. Under the existing franchising laws of the state, Tesla cannot conducts its business model or rely on third-party dealerships. It calls its stores “galleries” to bypass the dealership system and educate consumers about EVs in six retail locations in Austin, Dallas, Fort Worth, and Houston. Texans require placing orders at Tesla.com and receive deliveries in California.
David White, a Tesla spokesman in Texas, called for the end of the direct-sales restriction: “If Texas is truly ‘wide open’ for business, our elected officials should take the appropriate steps to end these frivolous regulations in 2017.” The latest support from the strongest party in Texas provides a massive assistance to the EV maker to form a new bill in order to sell vehicles directly via its Stores and Galleries. The company has found the weak link in the apparent impenetrable army of car dealers, which have stopped Tesla from expanding in the state.
Tesla still awaits the green signal from Texas Governor Greg Abbott, who questioned the company’s ability to provide strong customer service last year. Additionally, TADA members are not willing to give up their monopoly in Texas, as they believe that the existing laws “ensure competition and protect consumers.”
Meanwhile, Tesla has four service stations, 10 Superchargers, and 89 Destination Charging locations in Texas. Its service calls require routing through its offices in CA and it a special permit is required every time a customer wants to test drive a Tesla car.