Auto Dealers Come Out Against Change to Franchise Law

In a letter sent today to state lawmakers, the chairman of the Texas Automobile Dealers Association argued against granting Tesla Motors an exemption from the state's motor vehicle franchise laws to allow the electric carmaker to sell directly to customers.

The issue has come up this week with a vengeance as Texas is in the running to land a $5 billion battery plant to be built by Tesla. In remarks to the Fox Business channel, Gov. Rick Perry tied the move to woo Tesla to enhanced economic development in the state.

“Tesla’s a big project,” Perry said, as reported by The Dallas Morning News. “The cachet of being able to say we put that manufacturing facility in your state is hard to pass up.”

TADA Chairman Rick Cavender, though, said in his letter that he disagreed with changing the law to benefit a single company. "We believe this sets a bad precedent for future economic development efforts by linking them to special interest changes in law," he wrote.

He added that nothing in current law prevents Tesla from continuing to make sales as it does currently. Customers now can order a Tesla car from the company's website. They can also visit gallery stores although Tesla notes that customers cannot test drive cars or get pricing at those gallery stores.

Cavender also said that "the franchised motor vehicle dealers in Texas are more than eager to help Tesla succeed. In fact, numerous Texas dealers have contacted Tesla seeking an opportunity to retail their vehicles subject to Tesla's desires. ... We believe Tesla should be treated the same and that the established laws should apply to all. And these laws should not be put aside for any special interest or potential project."