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Tesla Underground: Texas Franchise Rules Make Model S Owners Skirt The Law

Tesla Underground: Texas Franchise Rules Make Model S Owners Skirt The Law

By David Noland David Noland
10,023 views Oct 22, 2013 31 Comments

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Tesla owners & supporters gather in Statehouse in Austin to support company [photo: John Griswell]

Tesla owners & supporters gather in Statehouse in Austin to support company [photo: John Griswell]

Over the last couple of years, Tesla Motors has fought legal and legislative battles in a number of states over proposed or current state laws that try to stymie its unique factory-direct sales and service model.

In most cases–Massachusetts, New York, and North Carolina, among others–Tesla has managed to stave off the proposed laws, which are typically backed by franchised car dealers, or it has won lawsuits based on current laws that were brought by dealer groups.

MORE: Auto Dealers Fight Against Tesla Stores: Elon Musk Weighs In

But in Texas, which has the nation’s most Draconian anti-Tesla rules, the company’s lobbying efforts have run into a brick wall.

As a result, Texan Model S owners have had to jump through all sorts of odd hoops to buy and maintain their cars.

“It was kind of a hassle,” says Brad Holt, a 26-year old Dallas filmmaker, describing the purchase of his 85-kWh Model S. “But in the end, it was worth it.”

Tesla owners & supporters gather in Statehouse in Austin to support company [photo: John Griswell]

Tesla owners & supporters gather in Statehouse in Austin to support company [photo: John Griswell]

Dealers Only

Texas law dictates that only franchised dealers can sell cars in the state.

Tesla, of course, has no dealers. It markets its cars through company-owned stores or galleries (think: Apple Store) and buyers complete the sale online through company headquarters in California.

Service and warranty repairs are also handled by Tesla-owned service centers.

Last spring, Elon Musk visited the Texas state capitol in Austin, and managed to find sponsors in the House and Senate for a bill that would have allowed any American manufacturer of 100-percent electric cars (i.e., Tesla) to operate in the state without franchised dealers.
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