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.”
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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.