Houston North Entrance1

Texas Gov. Abbott Remains Steadfast In Maintaining Tesla Ban While Tesla Opens Fourth Texan Gallery

For more than two years, Californian automaker Tesla Motors [NASDAQ:TSLA] has been in a constant battle with auto dealer associations and pro-auto dealer legislators across the U.S. over its right to sell its luxury electric cars direct to customers at its own Tesla-owned stores.

Gov. Abbott of Texas says we'll be waiting a long while for a Tesla Store in the Lone Star State.

Gov. Abbott of Texas says we’ll be waiting a long while for a Tesla Store in the Lone Star State.

Auto dealer unions opposed to Tesla owning and operating its own stores and service centres say that the company is trying to subvert statutes designed to protect car buyers and franchised dealers from over-powerful auto makers. Tesla argues that its stores ensure the highest customer service for all of its customers — and that auto dealers are now trying to use the same laws which were once written to protect consumers are now being used to harm them.

Thankfully however, recent months have seen a gradual cooling of hostilities towards Tesla Motors, with more and more states coming to compromises over Tesla’s direct-to-consumer sales practices. Some have allowed Tesla to operate limited numbers of stores or creating exemptions to existing auto dealer franchise law, while others have allowed Tesla to operate on the same terms as a franchised auto dealer.

Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is. Texas Gov. Greg Abbott

But as even some of the biggest names in the auto dealer world are now standing on Tesla’s side of the aisle in support of its right to sell direct to customers, the Texas Governor Greg Abbott maintains that the Lone Star State will remain closed to Tesla Stores for the foreseeable future.

Tesla’s new Gallery and Service Centre isn’t likely to make Gov. Abbott very happy…

As Bloomberg reports, Tesla’s CEO Elon Musk has been trying to convince Texas legislators for two years to change the law to allow Tesla to operate legally within the state. That has included hiring twenty lobbyists and spending more than $150,000 on campaign contributions aimed at changing minds in the state capital.

Back in January, Musk even visited Austin days after the legislative session convened in order to plead the case for changing the law to allow direct-to-customer sales. But despite several pro-Tesla bills being proposed by supportive legislators, not a single one made it out of committee due to a lack of support from the wider House or Senate.

The reason why? According to Gov. Abbott, legislators don’t see what’s wrong with the system right now.

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” Gov. Abbott told Bloomberg Radio on Tuesday this week. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”

Texas may not Love Tesla, but the feeling isn’t mutual.

It’s an old argument which was once a commonly used reason given by auto dealers associations keen on stopping Tesla from operating its own stores and service centres. Yet Tesla’s exemplary after sales and service record — not to mention the highest reliability report scores and service report scores from Consumer Reports — have proven that argument wrong so many times that it has lost all credibility.

With over-the-air software updates and remote diagnostics capability too, Tesla doesn’t even always need a customer to bring their car to a service centre to be fixed: many common faults can be diagnosed remotely and then fixed at a customer’s home or place of work by one of Tesla’s highly-trained mobile ranger mechanics.

Tesla’s new Houston North Service Centre is impressive

In other words, the arguments being given by Gov. Abbott are ones which can be easily disproven.

So why is it that Tesla and Texas are struggling so much to come to an agreement? In a word, market size.

After California, Texas is the second-biggest automotive market in the U.S., with Texans buying more than $81 billion worth of cars every year. Allowing Tesla to operate within the state would not only dramatically increase the number of Tesla electric cars from the 3,000 cars currently registered in the Lone Star State, but would also likely dramatically cut into the profits of franchised auto dealers currently operating in the state — especially those who sell high-end luxury brands like Mercedes-Benz, Porsche, Audi and BMW.

But Tesla — like its fans in Texas — views it only being a matter of time before attitudes change. Indeed, more and more dealerships are starting to realise that the halo effect of Tesla’s high-end luxury Model S means that consumers who can’t afford a Tesla are looking to other, less-expensive electric and hybrid cars after seeing or experiencing a Tesla Model S for the first time.

Moreover, many realise that by supporting anti-Tesla measures, they risk actually losing customer support, with pro-Tesla customers voting with their feet if they feel their local dealership was party to anti-tesla lobbying.

For now, Texas remains closed to Tesla Stores, but that hasn’t stopped Tesla from opening its fourth Tesla Gallery today — offering interested parties the chance to find out more about electric car ownership while expanding its service centre network within the state.

The new location — Houston North — combines a service centre, supercharger site and Tesla Gallery. While customers can’t order a Model S at the new location, nor can they arrange for servicing in person, they can find out more about living with an electric car.

And if a customer asks why they can’t buy a Tesla Model S from the new Gallery — we’re guessing Tesla’s staff will have one simple direction.

“Ask your representative.”


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  • grendal

    The Governor is unaware that Tesla has the highest rating in the country for service beating both independents and dealerships. I suppose the truth and facts are unimportant to him

    • AceDoubleDown

      Who cares? Tesla cars are useless toys runnin’ on coal. (can’t see it from my house)

      • grendal

        -Says someone that is uninformed and doesn’t have a clue. The brain is a terrible thing to waste. Please get a clue, then come back with some real information and a decent argument.

        • AceDoubleDown

          Say Tesla cars do not run on coal. 75% FOSSIL FUEL – joke.

          • grendal

            It’s possible to use electricity from a coal fired plant but with a gas powered car you are always burning fossil fuels. With electricity you can get very clean. With a gas car you have no choice at all.

            The reason that you are a fool is because you don’t have to buy an electric car if you don’t want to. So what you are really fighting for is to give yourself LESS choices. Pretty much the definition of a clueless uninformed fool who is proud of his ignorance.

            Very much like this governor who is fighting for less choices for his constituents. What a tool.

          • Jonathan Tracey

            Two points, firstly my Tesla runs on 100% green electricity, I charge it every day from solar panels on the roof of my house, so no fossil fuel there.

            Secondly where do you think the power comes to turn the Oil they pump out of the ground into the Gas you pump into your car, oh yes that would be coal fired power stations, so not only are you polluting by driving your gas guzzler, your using fossil fuels just to make the refined fossil fuel.

  • David Gilmore

    Texas: transport devolved

    • offib

      What a coincidence that the governor of Texas shares the same last name as the Australian PM. Doesn’t help the family name, does it?

  • The state should prove that direct sales are hurting consumers first before banning Tesla from selling its cars. There’s obviously some protectionism happening in the state of Texas.

  • Farmer_Dave

    Republicans hate big government except when they don’t because their big business backers tell them to.

    • KIMS

      a thousand times what you said! -Not that republicans are the only party saying one thing and doing another thing… Its why I have such trouble engaging in politics..

  • bestofandy

    Protectionism plain and simple. But Abbot is also protecting his backers.

    • Jonathan Tracey

      I really dont understand why an American State is trying to stop and American company, who designs and builds cars in America, from Selling its product to American consumers in American shopping malls.

      • bestofandy

        Tesla’s lobbyists have argued that point, but politicians have blinders on. It’s really about protecting the car marketing model in Texas, which are the middle-men car dealers and maintenance shops, etc. They are scared shit-less.

  • AceDoubleDown

    Tesla cars are useless toys runnin’ on coal. (can’t see it from my house)

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