Tesla Preparing For Fight In Texas

Tesla Preparing For Fight In Texas
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) is gearing up to battle for legislative approval in Texas although the session doesn’t start for a couple of months yet. Last week, the company sent an email to state representative Joe Pickett D-El Paso and other members of the state legislature inviting them to the Formula One race weekend in Austin on Saturday.

Tesla trying to woo legislature

The invitation teases, “What does it feel like to go from 0-60 in 4.2 seconds without a drop of gasoline?” Texas will hold its next legislative session in two months, but the fight between the electric car manufacturer selling the car directly and dealers is already heating up, says a report from Elpasoinc.

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In El Paso, the shoppers can directly purchase an iPad from Apple store in Cielo Vista Mall and can get a sweater direct from Armani Exchange at the new store at the Outlet Shoppes at El Paso or a latte from Starbucks. But when it comes to cars, buyers have to follow the dealership route.

In the last legislative session two years ago, Tesla Motors Inc (NASDAQ:TSLA) tried to push a bill through legislature, but in vein. At the time, Tesla was considering Texas and three other states as the possible sites for a $5-billion battery plant. Gov. Rick Perry suggested reviewing the state’s franchise laws in hopes of luring the plant to Texas.

Galleries, not store in Texas

At present, Texas requires automakers to sell cars through franchised dealers. Tesla, however, does not like the middleman business model and aspires to sell its cars direct to consumers. The company has already rented retail locations in malls where consumers can buy a car in the same way as they buy a gadget at the Apple store in some states.

The Palo Alto-based company has opened two stores in Texas; one in Houston and the other at Austin, but they are called galleries because people cannot buy cars there. Employees of the store cannot discuss or reveal the pricing or the reservation process, according to Tesla. Additionally, these galleries cannot facilitate the visitors with a test drive or discuss the purchasing options or refer a customer to another store outside the state.

However, Texas allows the customers to order the car online, where the car is delivered at the customer’s preferred destination bearing no company markings, according to state law, and customers must do all the unpackaging themselves.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@wordpress-785388-2679526.cloudwaysapps.com
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