Tesla Motors Inc Not Welcome In Texas: Abbott

Tesla stockBlomst / Pixabay

Tesla Motors’ attempts to overturn a law that bars direct selling in Texas have yielded no results. Texas Gov. Greg Abbott said the state will not give any loophole to the laws that will allow Tesla to sell its high–end electric cars directly to consumers.

Abbott’s comments in contrast to former governor

Abbott, who is a Republican, told Bloomberg Radio on Tuesday, “Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is.”

The governor said if a consumer faces a breakdown in the car then a dealership should be in place to ensure the car is going to be alright. Any such mechanism, according to Abbott, is not visible in Tesla.

The Palo Alto-based company follows a model of selling cars directly to consumers without the intervention of any middleman dealers like in other states. However, Texas is going by its strict rulebook, thus not giving any leverage to Tesla. The state’s dealers association noted that these laws are in place for allowing Texans to choose cars across the state and not just in popular cities.

The comments made by Abbott are not in line with his predecessor. Former Gov. Rick Perry stated in an interview with Fox News Channel that the dealership laws prevailing in the state were “antiquated protections” that need revision. These comments were on the backdrop of the state looking to lure Tesla to build its $5 billion lithium-ion battery plant there. However, Tesla selected Nevada.

Tesla to continue the fight

Tesla, however, puts forth the argument that the traditional dealership model is unworkable for it because it does not manufacture its cars in massive quantity. Further, the company said that it enables customers to customize their car, which is why it cannot rely on dealers to handle their new technology with expertise.

Tesla is denying that it has sustained a defeat in Texas. The company stated that it has educated more consumers and lawmakers who will carry forward its campaign to enter the country’s second largest automobile market. On Tuesday, Ricardo Reyes, a company spokesman, said since Tesla is a growing company, “We are optimistic about the governor’s pro-business position” and hope to be selling direct soon.

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About the Author

Aman Jain
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@valuewalk.com

13 Comments on "Tesla Motors Inc Not Welcome In Texas: Abbott"

  1. Useless toys runnin’ on coal (can’t see it from my house)

  2. Probably, but given our corporate-stooge always-for-sale politicians these days, I really love the original version!

    OK, I’ll buy 10 shares of the Governor of Texas…. :-)

  3. Governor Abbott is a public servant. The public should contact him and tell him how they feel about his stance on Tesla.
    His public information can be found here gov.texas gov/contact/

    You can contact him through the website, telephone or mail.

  4. No, Abbott isn’t silly, he’s deceitful, dishonest.

  5. Exactly. The silly man is commenting on something he knows nothing about and using the talking points of the dealership associations.

  6. That would be the obvious conclusion from what I wrote since the facts disagree with his statement.

  7. More than 3,000 Texans have already purchased a Model S via the internet and successfully registered their vehicles at the DMV. What the author is talking about is restrictions that keep Tesla from giving test drives and closing deals in Texas showrooms. Tesla already operates 4 Service Centers in Texas. There are also 7 Supercharger stations at this time. This tidal wave will eventually be very difficult for even the Governor to stop.

  8. Abbott is very aware of that but he chooses to protect dealerships and big oil behind the guise of protecting the consumer.

    “The governor said if a consumer faces a breakdown in the car then a dealership should be in place to ensure the car is going to be alright. Any such mechanism, according to Abbott, is not visible in Tesla.”

    He’s not looking very hard. Tesla has service centers just like dealerships plus they do one better, Tesla has service rangers that go to you to repair your car.

  9. “Texas Gov. Greg Abbott Laboratories (NYSE:ABT) ” I think you meant to say ” Texas Gov. Greg Abbott”

  10. Few degrees of temperature rise will change oil rich corporation to run toward solar.

  11. Actually it is you who is unaware that the Governor,s palms have been greased by the auto dealers association.

  12. Of course Tesla is not welcome! GM will invest $1,4 billion in Texas. Abbot has to listen. They’ll be sorry when GM goes BK again.
    But that will be OK for Tesla then, buying the plant for a good price.

  13. The Governor is unaware that Tesla has the highest rating in the country for service beating both independents and dealerships.

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