Tesla Motors Inc (TSLA) Texas Fight For Consumer-Direct Sales Fails

Tesla Motors Inc (TSLA) Texas Fight For Consumer-Direct Sales Fails
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Tesla Motors Inc (NASDAQ:TSLA) has been launching challenges to state laws which go against the company’s direct-to-consumer sales model. Unfortunately the company’s latest challenge in Texas has failed—at least for the time being.

Tesla Motors Inc (TSLA) Texas Fight For Consumer-Direct Sales Fails

CEO Elon Musk went to Texas in April to speak before the legislature against the state’s laws requiring automakers to use third-party dealerships to sell their vehicles in the state. Currently Tesla Motors Inc (NASDAQ:TSLA) has showrooms in Austin and Houston, although the staff members at those showrooms are not allowed to actually sell the vehicles because Texas laws restrict dealerships owned automakers’ factories.

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Today Amy Wilson with Automotive News reports that the bills which would have made an exemption to those laws did not get to either the Texas Senate floor or House floor for a vote. The Texas legislature ended its regular session last Monday, and it won’t meet again until 2015.

Tesla’s Other State Challenges

Tesla Motors Inc (NASDAQ:TSLA) may have lost in Texas, but it has won other rounds in other states. It won a lawsuit filed by auto dealers in New York in April. Also Wilson reports that the automaker recently won separate challenges in Minnesota and Massachusetts.

State responses to Musk’s quest for a direct-to-consumer have been mixed. Tesla Motors Inc (NASDAQ:TSLA) applied for a dealership license in Virginia in April and was denied. The company is also battling state laws in North Carolina which would bar it from selling its vehicles directly to consumers over the Internet.

Taking Tesla’s Fight To The Federal Level

Musk has said that Tesla Motors Inc (NASDAQ:TSLA) will take the fight over its direct-to-consumer sales model to the federal level if it finds the need to do so. Musk said if each individual state continues to give Tesla problems with its sales model, then they will move the battle to federal courts and lawmakers.

According to the National Automobile Dealers Association, 48 states have restrictions on dealerships being owned by the factories of automakers. It also said that approximately 20 states have other statutes which could make things difficult for Tesla Motors Inc (NASDAQ:TSLA).

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at [email protected]
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