No Teslas In Texas

The Texas state legislature announced this week that it will not pass a bill allowing Tesla Motors Inc TSLA to sell its automobiles directly to consumers in Texas.

If Tesla wants to sell cars in Texas, it is going to have to do it via local franchise dealers.

No Surprise

Understandably, Tesla prefers to sell its automobiles directly, but Texas is just the latest state to ban direct sales. Auto dealer lobbyists have been fighting Tesla tooth and nail to prevent the company from skirting franchise laws in place to protect local automobile dealerships.

Musk Speaks Out

Following a similar ban on direct sales in New Jersey last year, Tesla CEO Elon Musk penned an open letter to New Jersey residents voicing his disappointment in the state’s ruling.

“Under pressure from the New Jersey auto dealer lobby to protect its monopoly, the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor, ended your right to purchase vehicles at a manufacturer store within the state,” Musk wrote.

“The auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none,” he added.

New Jersey later overturned the direct sales ban in March.

For now, Tesla is refusing to sell its automobiles via dealerships in Texas, so Texas citizens are the ultimate losers in the political tug-of-war. Tesla plans to continue fighting antiquated franchise laws, and it remains to be seen whether the company will ultimately get its way.

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