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Electric car sales bill is ‘life or death’ for us, Tesla CEO says

Electric car manufacturer Tesla Motors Inc. CEO Elon Musk testified Tuesday in favor of legislation on which his company’s business model for successful sales in Texas is dependent on.

House Bill 3351, filed by State Rep. Eddie Rodriguez, D-Austin, proposes that manufacturers and distributors of only electric-powered or all battery-powered motor vehicles are able to sell directly to customers and not through dealerships, as currently mandated by Texas law.

“For us this is life or death,” Musk told the House Committee on Business and Industry. “If we can’t go direct we will not be able to sell cars.”

Tesla (Nasdaq: TSLA) makes about 20,000 cars a year, selling half in North America, of which about between 1,500 and 2,000 are sold in Texas, Musk said. Such numbers pale in comparison to the 1.3 million gasoline cars sold in Texas, posing little threat to dealerships. He compared Tesla’s need to sell direct to how Michael Dell built his computer company’s sales and success initially.

“The law should not be changed for the sake of one manufacturer,” said Carroll Smith, speaking for the Texas Auto Dealers Association, which represents 12,000 franchised dealers.


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