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Texas - Bill to Close Tesla Service Centers - A Good Thing?

Texas - Bill to Close Tesla Service Centers - A Good Thing?

The Texas Dealerships have a very strong lobby, contributing to state legislator campaigns, and able to have strong influence over legislation that's considered when the Texas legislature meets every 2 years (for 4 months). The only product you can't buy in Texas today on Sundays is sold at the dealerships, who've successfully blocked any attempts to allow them to open on Sundays.

Tesla's attempts at getting approval for direct sales in Texas have been blocked every two years by the dealership lobby. However that hasn't prevented Tesla from opening Galleries and Service Centers and selling many Tesla S/3/X online. The lack of local Tesla Stores hasn't really impacted sales, and has actually demonstrated how little value the dealerships provide for new & used vehicle sales.

This time around, the Texas legislature is now considering a bill to prevent Tesla from operating any Service Centers in the state - which would clearly have a major impact on those of us who already own Tesla vehicles - and discourage new sales of Tesla vehicles in Texas. Service is a major revenue stream for the dealerships - and since EVs should require less long-term maintenance, it's not surprising they would now try to block Tesla from servicing vehicles in Texas.

However... If Texas does pass this bill and it is not vetoed by the Governor, this might be a good thing for Tesla in the long run. This might be enough of an overreach to build a pretty strong case that state-supported dealership requirements inhibit interstate commerce and adversely impacts customers - and could lay the groundwork for throwing out all of the dealership protections.

Though that could take years to get through the courts - and in the mean time, Tesla would be forced to jump through some extra hoops to set up a structure that would allow Tesla to provide Service Centers through (semi) independent Service Centers.

Plus, Texas generally places few restrictions on businesses, so even with the support of the dealerships, this bill may not get approved.

carlk | 18 mars 2019

This whole thing will eventually be solved in courts. The only question is how much Tesla would want to spend resources to do it. It will make Tesla more willing to fight when there is more at stake. As for this particular legilation it has large civil damage lawsuit written all over it. Imagine a vehicle got into accident because the owner could not obtain service in the state on time.

reed_lewis | 18 mars 2019

Here in enlightened Massachusetts, our Supreme court ruled for Tesla back in 2014 saying that because of the way the law was worded, in that any manufacturer that sells through dealers cannot sell direct also. Tesla as we know does not have independent dealers.

Here is the ruling: https://www.dykema.com/resources-alerts-massachusetts-supreme-court-rule...

jordanrichard | 18 mars 2019

reed_lewis, and that is the crux of it. "...the way the law was worded". Each state is different and like here in CT, some states have it worded as such that an OEM has to go through dealers.

DubDub | 18 mars 2019

Senator Kelly Hancock has released this statement clarifying the intention of the bill:
https://senate.texas.gov/members/d09/press/en/p20190318a.pdf
This is the media once again reporting without doing a slither of research. Not even the great and powerful Texas dealership lobby could get something this absurd passed.

Earl and Nagin ... | 18 mars 2019

@DubDub,
That's kind of a nebulous statement. One certainly can't trust such an unclear, cliche-filled statement from a politician.
I think I'd go with what the press says until I could read the bill myself or get a careful read from someone reliable.

carlk | 18 mars 2019

I guess Kelly Hancock could apply for Sarah Sanders' position when she leaves the office.

carlk | 18 mars 2019

I guess Kelly Hancock could apply for Sarah Sanders' position when she leaves the office.

Madatgascar | 19 mars 2019

If that’s what passes for clarification in Texas, I’d hate to see obfuscation.