Tesla Makes Sales Pitch to House Panel

At a packed committee hearing Monday evening, advocates for Tesla Motors told a panel of Texas House members that it was time to bring state car sales laws into the 21^st century and allow the company to sell its luxury electric vehicles in Texas.

“The future is here,” said state Rep. Eddie Rodriguez, D-Austin, author of a bill that would allow Tesla to operate up to 12 stores in Texas. “The way in which we buy and sell goods is changing and we must adapt.”

The California-based company builds cars and sells them directly to consumers, bypassing car dealerships — a business model prohibited by Texas law. Tesla currently operates three “galleries” in Austin, Dallas and Houston, but employees there are barred from normal dealership activities like discussing prices or offering test-drives.

Rodriguez told the House Licensing and Administrative Procedures Committee that innovative technology companies like Tesla cannot succeed under the current system. His legislation, House Bill 1653, is similar to deals the company has struck in other states like New York, Ohio and Pennsylvania.

A companion bill, Senate Bill 639, was filed by state Sen. Kelly Hancock, R-North Richland Hills.

For now, buyers in Texas have to order the car online from the company’s headquarters in California. The vehicles are delivered in unmarked trucks, and customers have to unwrap their new cars themselves, because the law prohibits Tesla employees in Texas from engaging in any sales- or delivery-related activity.

Opponents pushed back against Rodriguez’s bill on Monday, arguing that it creates two separate systems for car sales — one for Tesla and one for everyone else.

“Everyone should play by the same rules,” said Bill Hammond, CEO of the Texas Association of Business.

“It’s a solution looking for a problem. Tesla’s problems are self-imposed,” said Carroll Smith, who represents Texas on the National Automobile Dealers Association board in Washington, D.C.

The committee did not vote on the bill Monday.

Disclosure: Tesla Motors and the Texas Association of Business are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.