Advocacy: Texas

Under the current Texas Occupations Code (TEX OC. CODE ANN. § 2301.476), Tesla is unable to sell its vehicles directly to the public because it has no franchised dealer relationships in Texas (or anywhere else in the U.S.). This regulation not only affects Sales, but also Service of Tesla vehicles for existing customers.


How does this affect you?

Sales

We currently operate two Tesla galleries in Houston and Austin. In an effort to comply with the current laws, employees at these galleries are prevented from discussing pricing and the reservation process. This includes any discussion on financing, leasing, or purchasing options. Also, galleries cannot offer test drives. The store’s interactive kiosks are also amended to remove pricing. Lastly, we are unable to refer the customer to another store out of state. This puts Tesla at a serious disadvantage and inhibits our ability to reduce misconceptions and educate people about Electric Vehicles and the technology. Furthermore, people are forced to leave the gallery frustrated, lacking sufficient information about the car and the brand.

Delivery

Cars are shipped to Texas via a third-party transport company. Tesla employees cannot accompany the vehicle or provide information or guidance on operations until 48 hours after the customer takes delivery. In an attempt to accommodate our customers, owners are invited to watch online tutorials on vehicle functions – or they can call the Tesla Service number and speak to someone at Tesla Motors, Inc. in Fremont, CA regarding their questions.

Registration

Normally, vehicle registration is included in the final paperwork submitted to take ownership of the vehicle. Tesla completes the vehicle registration process for customers in other states. In Texas, customers must first take ownership of their vehicle and then register the vehicle themselves at the Texas DPS. At this time, customers pay Texas Registration and Titling Fees – but most importantly, Texas Sales Tax. Because this process occurs after the sales transaction, many Tesla customers have reported their inability to fold the sales tax cost into the total cost of the vehicle for financing purposes. In some cases, customers have to pay more than $5,000 out of pocket that they otherwise could have paid over years of financing. This isn’t fair to Texas Tesla Customers

Service

Customers in need of warranty service must call the Tesla Service to speak to someone at Tesla Motors in California. Based on their over-the-phone explanation, a Tesla Service employee determines whether repair work is needed/warranted. If so, the customer is sent to have the work sub-contracted by a local subsidiary, Tesla Motors TX. The local repair centers – currently in Austin and Houston – cannot advertise that they do warranty repairs nor can they discuss any additional repair needs or concerns with the customer. Tesla Motors TX then bills Texas Motors, Inc. for the work. If customers have additional warranty concerns, Tesla Motors TX cannot discuss them with the customer – the customer would need to call Tesla Motors, Inc. back and go through the process again.


What is Tesla trying to do?

In short - Tesla is trying to provide the same level of customer service to Texans that it provides to customers in Florida, Minnesota, Missouri, California, North Carolina, Oregon, Massachusetts, New York, and many other states.

Prior to the filing deadline, Tesla Motors reached out to Sen. Craig Estes (R-Wichita Falls) and Rep. Eddie Rodriguez (D-Austin) who agreed to file bills on our behalf. These bills would permit U.S.-based manufacturers of 100% electric- or battery-powered vehicles to sell directly to Texas consumers. This approach does not harm any existing franchise and addresses dealer concerns that foreign manufacturers of conventional automobiles may by-pass existing franchise laws and regulations.

We are very fortunate to have recently been notified that both bills will receive hearings in their assigned committees:

In the Senate, SB 1659 was referred to the Transportation and Homeland Security Committee. A hearing was held Wednesday, April 3rd. Diarmuid O’Connell, Tesla Motors VP of Business and Corporate Development, testified and was supported by a group of Tesla customers and fans. Thank you everyone who attended the hearing and contacted local representatives with their support. Your advocacy was incredibly valuable. However, we still have more work to do.

In the House, HB 3351 was referred to the Business and Industry Committee. A hearing date is scheduled for Tuesday, April 9th at 1:30 pm at the Texas State Capitol, room E2.014. Elon Musk, Tesla Chairman, Product Architect & CEO, will be testifying.


What can supporters do?

1. Take a look at the Senate and House Committee websites – if you or your friends are represented by a State Representative or Senator on this committee, feel free to contact their Capitol office and register your support: “I’m calling to register my support for SB 1659/HB 3351 – I want what’s fair. Texas dealers are preventing my car from being repaired efficiently and forcing money out of state.”
“I’m calling to register my support for SB 1659/HB 3351 – I believe in the free market!."

2. Attend a hearing at the State Capitol (Bring your Tesla!) and register your support and/or seek an opportunity to testify in favor of the bill.
  • In the House, one of the many iPads attached to the Capitol walls can be used to check-in. With the iPad registration, you can register your support any time before the hearing (without ever stepping foot in the committee.)

  • Unless you wish to testify, you can fill out the card and leave. Those who wish to speak will have to wait until the bill comes up for discussion in accordance with the hearing schedule.

  • For those interested in coming down to show support, parking is available in the Capitol Visitors Parking Garage at 1201 San Jacinto located between Trinity and San Jacinto Streets at 12th and 13th streets.


    About Tesla in Texas

  • Tesla operates two Galleries in the State of Texas (Austin and Houston). Tesla also operates two Service Centers (with limited capability) in Dallas and Austin. Our Houston Service Center is coming soon.
  • There are more than 400 Tesla Roadster and Model S owners in Texas currently with more arriving every week.
  • Franchises have been proven to increase the cost to purchase a vehicle (an average of 6% on every transaction) – U.S. Department of Justice Study “Economic Effects of State Ban on Direct Manufacturer Sales to Car Buyers”
  • Every new Tesla store brings an additional $7-12 million to the local economy in their first year and approximately 20 new jobs.
  • Tesla Motors is a U.S.-based, American-owned manufacturer of battery electric vehicles founded in 2004 with a mission to catalyze the mass market for electric vehicles.
  • Tesla successfully launched the Roadster in 2008 with its industry-leading efficiency (245 miles range on a single charge), performance (0 to 60 mph in 3.7 seconds), and design.
  • According to Bob Lutz, as a result of Tesla’s accomplishments, General Motors developed and introduced the Chevy Volt, a plug-in hybrid-electric vehicle, in 2010.
  • The Tesla Model S is built entirely at a plant in Fremont, California, where the Company currently employs more than 4,000 engineers and manufacturing associates.
  • Tesla's Model S was launched in 2012 to wide industry acclaim including Motor Trend’s 2013 “Car of the Year,” Automobile Magazine’s “Car of the Year”, Yahoo Autos “Car of the Year” and most recently, “World Green Car of the Year”

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