Senate Bill affecting dealership law

edited November -1 in Texas
Senate Bill 1659 has been introduced and there will be a hearing on April 3, 2013 at 8:00 AM.

The hearing will be held in Room E1.016.

The bill's text is here: http://www.capitol.state.tx.us/tlodocs/83R/billtext/html/SB01659I.htm

Here's the meeting notice: http://www.capitol.state.tx.us/tlodocs/83R/schedules/html/C6402013040308001.HTM

You can track the status of the bill here: http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=SB1659


  • edited November -1
    INAL, but I'm wondering if Tesla has a non-TX store that will qualify as a "dealership" as defined in this area of the Texas law.
  • edited November -1
    More info. Elon has <a href="">tweeted</a> that Texans should <a href="http://www.fyi.legis.state.tx.us/Home.aspx">contact their legislative representatives</a> if they want to help Tesla in Texas.

    The bills of interest are Senate Bill 1659 and House Bill 3351. Relevant links can be found <a href="http://www.capitol.state.tx.us/">here</a>.

    There will be a <a href="http://www.capitol.state.tx.us/tlodocs/83R/schedules/html/C6402013040308001.HTM">hearing on SB1659</a> on Wednesday morning at 8:30 in E1.016 of the Capitol Extension.

    Motor Trend has the article: <a href="http://wot.motortrend.com/tesla-takes-on-texas-dealers-association-349795.html#axzz2P3te9cYC">"Tesla Takes on Texas Dealer’s Association"</a> that Elon referred to.
  • edited November -1
    Txjak - Thanks for the links, contacted reps, hopefully this will go the right way.
  • edited November -1
    Wrote a letter to my Senator on this. Cut and pasting here in case people want to reuse and refine for their letter:

    Senator <your senator>,

    I am writing you to SUPPORT passage of S.B. No. 1659. It has been decades since Texas put laws in place to support local business ownership of the value-chain via the existing auto dealership laws. While these laws served a purpose, they are now preventing the entrepreneurial spirit that we Texans cherish so dearly. A start-up company focused on innovative ideas and transformation being required to create, state by state, dealership infrastructure to sell vehicles is simply burdening them with costs and inefficiency. Companies like Tesla Motors waste money jumping through these outdated hoops and this only serves to stifle competition. These laws now prevent considering more efficient customer engagement models and could be a barrier to personal transportation innovation going forward.

    Changes in the industry and our economy have rendered the existing laws covering the automobile industry outdated. First off, car dealerships cause a loss of control of the customer experience. New product companies following Apple's lead need to own this key part of the exchange to own the final result. For a car technology company forging new ground with a small customer base there is no way to successfully sublet that engagement to a 3rd party. Failures and issues will occur and the response to those failures are key to winning loyalty. Dealerships certainly have a stake in that but they do not have stake in providing consistency and let me be so bold express concern from my own experiences that some dealerships have no interest in customer satisfaction at all. Secondly, more and more people buy things online and want to eliminate middlemen to gain more buying power. Similar to the alcohol distribution laws Texas and many other states have had that have begun yielding to new purchasing and delivery models, the automobile industry is now asking for this freedom. Why do we provide this freedom to every industry but this one?

    Please let me know if there is anything I can do to help. I am a Tesla owner. I am a Texan. I am an American. Please allow companies like Tesla the freedom to try new ideas and support American manufacturing. Texas is a huge market for automobiles and automobile manufacturers like Tesla create new jobs here as their market grows. Making it easier for new companies to do business here is what the Texas Senate is all about!

  • edited November -1
    Thanks for the heads up (txjak) and example letter(sandman). I contacted both my state senator and congressman.

    Took me all of 5 min to write both.

    In case you are looking for it, you can locate your representative here: http://www.house.state.tx.us/members/find-your-representative/
  • edited November -1
    Hey Fellow Texans,

    Just a quick follow up on this post.

    My Senator: Dan Patrick provided the following response in relation to my email contact to his office on SB 1659. Please consider leveraging this opportunity to reach out to your legislator if you have not yet.

    <i>"Thank you so much for taking the time to write and share your thoughts with me about Senate Bill 1659, relating to manufacturers and distributors of only all electric-powered or all battery-powered motor vehicles. Each letter I receive is carefully considered before I vote on any piece of legislation. As a member of the Senate Transportation Committee, your thoughts are important to me.

    If you have additional questions about legislation, be sure to check the following website:


    If you have any other comments about this or any other issues of concern to you, please contact my office, and my staff will be happy to assist you. It is an honor to serve you in the Texas Senate.

    May God bless,
  • edited November -1
    Sent Email to both Senator and State Rep. I hope they will support the future!!
  • edited November -1
    Live Stream at 8:25am April 3, 2013
  • edited November -1
    @jed-99aggie If you watched the live stream, you know your Senator Dan Patrick appeared to be the one the most against this bill. We need to schedule something at his offices or in Austin. I should go back and transcribe what he said exactly, but when the bill sponsor said that they all needed to listen to the facts before making up their minds Dan said something along the lines that he would but that he didn't think he would be convinced and that on some topics he would never be convinced (I'm paraphrasing).

    His main point was "we need to think about the consumers in this case". I'd like to ask him how much he thinks the dealers would have marked up the first performance models above Tesla. $20k? $30k? Not including the cost of the undercoating.
  • edited November -1
    @Stephen, Thanks for the heads up. I was not able to watch the stream, but very disappointing to learn of his lack of support (entrenched position).

    I agree a face to face meeting is in order. Never requested one. Any experience/coaching out there?
  • edited November -1
    I probably shouldn't have written this angry, but here is what I sent to Senator Patrick after the hearing:

    Senator Patrick:

    I watched the committee hearing on SB 1659 this morning and I have a few comments:

    1) The Tesla Model S is an extremely popular car, especially in the technology and early adopter crowd. However, once the car won every car major award for 2013, the car found more mainstream appeal. Given the low volume and multi-year wait time initially, can you imagine the markup the dealers would have put on this car after the awards came out? You said you were thinking of consumers, but I guarantee the dealers would have tried to sell this car for $30,000 more than sticker (because that is what people were asking on the secondary market). Don’t get me wrong, I have no problem with these companies making a profit, but your ‘protect the consumer’ comment cuts both ways because especially in this market, the dealer price is likely to be much higher, not cheaper.

    2) Most people hate the current dealership experience, and Tesla is trying to address that by turning the experience into a positive one. Tesla should be free to sell their car for a fixed price just like Apple sells their iPods.

    3) The dealer on the left pled poverty, saying that if they make even $1000 on a car they would be happy, but often ‘lost money’ to keep a customer for service. This goes right to Tesla’s argument. Let’s say Tesla is forced to open a dealership and sell their cars alongside other cars, especially those that use gasoline. Let’s say GM decides to give the dealers a $1000 bonus for all Volts sold that month. Which car do you think the salesman is going to push that month? Tesla or the car with the bonus from the big manufacturer?

    4) I find it interesting that the dealer worried about Tesla’s safety said he had a Fisker dealership. Are you aware a brand new Fisker burned down a garage in Sugar Land endangering the family inside? (See: http://www.autoweek.com/article/20120508/CARNEWS/120509860 ) And that others have burned while just parked on the street or when immersed in water? If this dealer is worried about vehicle safety, he should get his own house in order first. As a dealer, he should know the agency to ask about federal safety ratings is NHTSA, not Google.

    5) You can say this isn’t about free market competitiveness, and you may even believe that, but here is the real story: tiny Tesla sold more Tesla Model S vehicles (4751) in Q1 than Chevy sold Volts (4244) and Nissan sold Leafs (3539) despite those other cars being half the price. But what the dealers fear are the other numbers for Q1: Audi A8 sold 1,462, Porsche Panamera sold 1,384, Lexus LS sold 2,860, and the list goes on (http://evtripplanner.com/teslasales.php). If you really believe in the free market, you’d let Tesla sell direct and let the best car win.

    Thank you.


    Stephen Pace
    Houston, TX
  • edited November -1
    @jed-99aggie Regarding meeting the legislators, it is much easier to do that when they aren't in session. At the moment, they spend most of their time in Austin, so if you wanted to meet with them directly, you'd have to do it there. Best is to contact their offices and ask for a meeting. When we did the unofficial Tesla Capital day, we had a staffer for one of our local reps email all of the other staffers telling them we were there on the roof, and then reached out to individuals to come meet us. We also went directly to their offices in the Capital and signed in and made our pitch to the staffers. At the end of the day, unless you have a set meeting, the staffers are probably as far as you'll get, but it doesn't hurt to try. Once the session is over, you could probably drive directly to his office in Houston, but even then they are all part time so you'd want to try and schedule something. Good luck!
  • edited November -1
    Please, Transcribe it if you have the time. I wrote him and he replied with exactly what others received. I'd like to hold his feet to the fire.
  • edited November -1
    I took a look at the Senate District 7 map.


    No wonder there is a bias. Anyone know how many dealerships exist on <b>45N<b> (from 1960 to the Woodlands) on <b>249<b> (up through Tomball) on <b>290<b> (from the beltway 8 out) and on <b>I10 West<b> (from just outside 610 to Fry rd).

    I can only imagine how much "campaign support" Senator Patrick took from dealership interests. I guess time for some more research.
  • edited November -1
    I live in VA but I want to thank all the Tesla Texans taking action here. The rest of the country is watching you. How this plays out might set a precedent for the rest of us...bad or good.
  • edited November -1
    Here is the live footage of the hearing:


    The Electric Car part starts at 23m40s. RealPlayer is required.
  • edited November -1
    Here is a copy of my message to my congressman:

    Rep Elkins,
    This contact is in follow up to my correspondence of April 1, 2013 and is to reaffirm my interest in and ask for your support for HB3351, filed by Rep. Eddie Rodriguez.

    This bill will be in hearing tomorrow April 9 before proceeding through the legislative process. Your continued support for this bill is requested.

    I am a strong believer in a free market, know that this legislation will have a positive impact on constituents of your district as well as citizens of Texas at large, and believe that this will contribute to the growth of the Texas economy.

    This bill is more than just support for free enterprise, energy independence and support of the American manufacturing sector.

    Feel free to contact me if you have any questions about this topic. I appreciate your time and valuable support in this matter.

  • edited November -1
    Here is a copy of my follow up to my Senator who was disappointing last week during the SB1659 hearing:

    Senator Patrick,

    This contact is in follow up to my correspondence of April 1, 2013 (including the hearings of April 3) and is to reaffirm my interest in and ask for your reconsidered support for SB 1659, filed by Sen. Craig Estes.

    After reviewing the hearings, I was disappointed to learn of your criticisms of the proposed bill.

    The current dealership experience leaves a great amount to be desired for the end consumer. The approach brought to bear by Tesla (and in existence in other states) has completely redesigned the end customer buying and service experience, directly to the benefit of the buyer (your constituent).

    Additionally reflecting on the testimonies and bill's signed role call at the end of the hearing; the only entities registering against the bill were dealers, not end consumers. However the proposed bill specifically acknowledges that auto manufacturers with an established dealer model are beyond the scope of this bill (which is in alignment with the original intent of the existing legislation.)

    This bill is more than just support for: the end consumer, free enterprise, energy independence and the American manufacturing sector.

    I am a strong believer in a free market, know that this legislation will have a direct positive impact on constituents of your district as well as citizens of Texas at large, and believe that this will contribute to the growth of the Texas economy.

    Feel free to contact me if you have any questions about this topic. I appreciate your time and future support in this matter as it moves through the legislative process.

  • edited November -1
    For those of you that cannot make it to the hearing today, here is a link to the page that will have the link to the live stream at 1:30pm. It is live stream 8.

  • edited November -1
    So what happened at the hearing? I can't access the link.
  • edited November -1
    After hearing from Elon Musk and others, the HB 3351 was left pending as committee (Committee on Business & Industry) business.
  • edited November -1
    That doesn't sound like good news.
  • edited November -1
    With all the entrenched positions, it wasn't likely to pass the first time anyway. It will take several tries.
  • edited November -1
    The legislature only meets every two years if I remember right, so let's hope that's not the case!
  • edited November -1
    It would be nice, but I'm not counting on it. However, I was pleasantly surprised as to how easy it was to purchase my Model S. Tesla has done a lot to improve the experience since the first Model S was purchased. The hardest part--other than parting with the money--was the 15 minute line at the county tax office.
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