Blog Texas Legislature Kills Direct Sales Bill

Tesla’s efforts for direct sales in Texas were killed Monday by the state legislature.

The automaker had pushed legislation in March that would have allowed vehicles to be sold directly to buyers, rather than through a franchised dealership.

“Once again, the legislature failed to act on Texans’ demands for 21st century car-buying options, meaning the state will continue to fall behind and lose out on valuable economic development opportunities,” the company said in a statement.

 

[LCR1]

Tesla has a monopoly on Tesla's, not on automobiles. Same is true for Ford and Toyota.

Show me any manufacturer that doesn't have exclusive control on their wholesale price.

The variation between (same brand) dealership prices is based on who is willing to make less on the sale. No one would willingly go below their cost.

Edit typo

Exactly Tesla has a monopoly on Teslas to the consumer.

Ford sets wholesale pricing to the dealer and the dealers set pricing to the public. This allows competition as a person can simply go to another dealer if one is being an ass. With Tesla they not only have a wholesale monopoly, they have a public monopoly, and there are laws against monopolies. If Tesla doesn't want to allow competition they can keep doing what their doing, they can still sell Teslas to Texans.

 

[TexasEV]

There’s quite a lot of misunderstanding in this thread.
LCR1, you don’t understand the definition of monopoly, much less an illegal monopoly.
DragonWatch, you don’t understand that the Texas law preventing Tesla from SELLING cars in the state does not prevent Texans from BUYING whatever we want. The sale takes place in California when it’s done on the Tesla web site, or in another state from a Tesla store.
Mkjayakumar, the state can’t refuse to register your car if you own it, no matter how or where you bought it, as long as you pay the tax.

 

[GWord]

With Tesla they not only have a wholesale monopoly, they have a public monopoly, and there are laws against monopolies.

That's not how the Sherman Act works. There's also a fairly compelling argument that the practice of forcing a local middleman into the value chain through legislation is, in itself, an anti-competitive practice designed to put regulation on interstate commerce.

 

[jbcarioca]

Texas has, (unless it has changed since my team designed a dealership tax collection system to Texas 20 years ago),perhaps the most complex system in the US because there is a difference between use and domicile, there are over 300 unique motor vehicle taxing entities, and tax collection law varies between dealer sale and delivery, private sales and out-of-state sales.

That makes the Tesla process difficult and, by definition inconsistent, because each county, 254 of them, can have and often do different processes.

OTOH, unlike some states, sales tax is net of a trade-in. non-Texas registration can be changed to Texas pretty easily with a credit for non-Texas taxes. That said, each county may have a different process for such transactions.

By all evidence Tesla has become pretty adept in handling all this and those high prices do provide nice income for the local entities also, so nothing will be likely to stop the Tesla sales and registration process as it has evolved. It will just be cumbersome.

Will it change? Not unless Tesla offers to build the next Gigafactory in Texas. Then who knows?

 

[jelloslug]

Exactly Tesla has a monopoly on Teslas to the consumer.

Ford sets wholesale pricing to the dealer and the dealers set pricing to the public. This allows competition as a person can simply go to another dealer if one is being an ass. With Tesla they not only have a wholesale monopoly, they have a public monopoly, and there are laws against monopolies. If Tesla doesn't want to allow competition they can keep doing what their doing, they can still sell Teslas to Texans.

All you get with franchise dealership is the ability to negotiate the premium you get to pay over the the price set by the manufacturer. The only one to actually benefit is middle man (the dealership).

 

[LCR1]

That's not how the Sherman Act works. There's also a fairly compelling argument that the practice of forcing a local middleman into the value chain through legislation is, in itself, an anti-competitive practice designed to put regulation on interstate commerce.

Not sure where I mentioned the Sherman Act

There’s quite a lot of misunderstanding in this thread.
LCR1, you don’t understand the definition of monopoly, much less an illegal monopoly.

I do understand the definition of monopoly.

 

[LCR1]

All you get with franchise dealership is the ability to negotiate the premium you get to pay over the the price set by the manufacturer. The only one to actually benefit is middle man (the dealership).

I need a new engine for my truck I bought at auction, Ford orders me a long block. I need a new motor for my Tesla I bought at auction, Tesla says they no longer support the vehicle but they can sell me a whole car. Who wins?

 

[jelloslug]

I need a new engine for my truck I bought at auction, Ford orders me a long block. I need a new motor for my Tesla I bought at auction, Tesla says they no longer support the vehicle but they can sell me a whole car. Who wins?

The straw man.

 

[LCR1]

The straw man.

Not sure what you mean, I got the engine for my truck and I've now got 186K miles on it. Can anyone order a drive train from Tesla? The franchised dealer is willing to work with me because if not I'll go somewhere else. I've had multiple times a dealer say they can't sell me an item or it's going to be a stupid amount. I walk down the street or go online and order from another dealer who's willing to make a sale.

 

[mongo]

I apologize to the mods in advance for what may be cross the line into a snippy statement.

That's not even wrong.

 

[DragonWatch]

DMV could refuse to register your car stating the car was not bought through legal channels

Good point, again Texas does not require annual registration as best I can tell from all the Texas plates running around WA state with no stickers indicating what month or year a plate is out of registration. No sticky tabs for month or year! Why not, again give your taxed money to another state? Insurance companies will not care what color your state is provided your money is green Why not buy a used Texas plate online? If the driver obeys traffic laws, who is the wiser. I do not condone breaking the law what-so-ever, but when laws like the prohibition amendment create speakeasies then lawmakers are responsible for the corruption they spawn. People will always follow the path of least resistance and word of mouth will get out, if by no other means than the internet/Facebook/Twitter.

Military personnel can do this very easily, and totally legal. If stationed in Texas, they can legally register their car in the state, home of record and a Texas can do nothing to them!

 

[LCR1]

Good point, again Texas does not require annual registration as best I can tell from all the Texas plates running around WA state with no stickers indicating what month or year a plate is out of registration. No sticky tabs for month or year! Why not, again give your taxed money to another state? Insurance companies will not care what color your state is provided your money is green Why not buy a used Texas plate online? If the driver obeys traffic laws, who is the wiser. I do not condone breaking the law what-so-ever, but when laws like the prohibition amendment create speakeasies then lawmakers are responsible for the corruption they spawn. People will always follow the path of least resistance and word of mouth will get out, if by no other means than the internet/Facebook/Twitter.

Military personnel can do this very easily, and totally legal. If stationed in Texas, they can legally register their car in the state, home of record and a Texas can do nothing to them!

Texas does have yearly inspections and yearly registration.

 

[Electroman]

Good point, again Texas does not require annual registration as best I can tell from all the Texas plates running around WA state with no stickers indicating what month or year a plate is out of registration. No sticky tabs for month or year!

Not correct. We register every year and get a sticket with year and month that we have to affix in the windshield

 

[SageBrush]

First step is service centers

 

[LCR1]

First step is service centers

What do you mean? Tesla already has service centers in Texas, hell I have two to choose from in Houston

 

[SageBrush]

What do you mean? Tesla already has service centers in Texas, hell I have two to choose from in Houston

That is my point. Texas is already in a good place for Tesla. The states without direct sales; and much more importantly, local service centers like NM and most of Colorado are a much greater impediment to sales.

 

[LCR1]

That is my point. Texas is already in a good place for Tesla. The states without direct sales; and much more importantly, local service centers like NM and most of Colorado are a much greater impediment to sales.

So CO just doesn't have service centers now, or they are not allowed to even build service centers?

 

[SageBrush]

So CO just doesn't have service centers now, or they are not allowed to even build service centers?

So far as I know, one in Denver .
None in NM

As you can see, TX is in pretty good shape compared to its neighbors

 

[DragonWatch]

Not correct. We register every year and get a sticket with year and month that we have to affix in the windshield

Not correct. We register every year and get a sticket with year and month that we have to affix in the windshield

Okay, my mistake. However, I see repeatedly Texas plates without sticky notes for month and or year of renewal. I will spend more time observing Texas plates here in Washington. If for no other reason than to correct my thinking/view. And, thank you both for educating.

 

[Rockster]

Okay, my mistake. However, I see repeatedly Texas plates without sticky notes for month and or year of renewal. I will spend more time observing Texas plates here in Washington. If for no other reason than to correct my thinking/view. And, thank you both for educating.

Years ago Texas moved the registration stickers from the corners of the license plates to the inside of the windshield to reduce theft. Apparently, some people found it easier to steal someone else's registration sticker than to just register their car. We have annual inspection, too, but that doesn't require a separate sticker. One just needs to show proof of inspection as a condition to renewing the annual registration sticker.