By Sterling McCall | April 29, 2013 | Updated: April 29, 2013 6:33pm
There comes a time when you start to realize the old rules simply don’t work as well as they should.
Just ask Mr. Elon Musk.
Musk, co-founder and CEO of U.S.-based Tesla Motors, is no stranger to Texas, selling many of his popular, high-performance 100 percent electric cars to Texans. Musk is also well known for developing plans for a SpaceX launching facility in Brownsville – a move that promises to transform the economy in the lower Rio Grande Valley.
While you may see Tesla cars on roadways across our state, you can’t actually buy them in our state. That’s because a car or truck manufacturer can’t sell directly to Texas consumers. Current law requires vehicles be sold through a dealer.
It’s a system that works well and has for many years, but it doesn’t reflect some changing dynamics in the automobile market today.
As a 40-year franchise automobile dealer in Texas, I think it’s time we updated our laws to better embrace competition and reflect the realities of today’s marketplace.
That’s why I support legislation now being considered at the state Capitol that would allow U.S.-based manufacturers of 100 percent electric vehicles who have never been granted a franchise dealership to sell directly to Texas consumers.
It’s a change that’s needed because manufacturers like Tesla don’t fit the traditional model for a volume retail dealership, not having or needing the full and extensive range of service, parts, new and used vehicle departments.
Tesla’s model is to sell direct to consumers. And, while existing law in Texas dictates cars must be sold through a dealer, I believe there is room in our state for franchise dealers and a U.S.-based all-electric-car manufacturer to both sell to consumers. That is what pending legislation would allow, updating to fit this unique circumstance.
We ought to welcome competition – and the innovation – that Tesla brings, just as dealerships already compete to sell more gas-powered, hybrid and natural gas vehicles from the country’s larger manufacturers.
It’s something the public wants. Ninety-nine percent of respondents to a Los Angeles Times online poll said that Tesla ought to be allowed to conduct direct sales of its cars. Right here in Texas, 87 percent of respondents in an Austin Business Journal online poll agree, too.
Other states don’t limit competition the way Texas does in this area. Tesla is allowed to sell its cars directly to customers in states such as New York, Florida, California, North Carolina and Massachusetts, to name a few.
It’s time Texas followed suit and truly opened up our state for business – and for the benefit of consumers by delivering greater choice and competition in the marketplace. Such a change would not only bring greater fairness to the process, it would generate additional investment in Texas, creating more jobs for Texans.
When it opens one of its stores or galleries, Tesla’s investment pumps an added $7 million-$12 million into the local economy in the first year alone.
The changes being considered by state leaders in Austin represent a sensible approach that would not harm existing automobile franchise dealer arrangements but would offer tremendous benefits to consumers and to our state’s larger economy.
We have the ability to quite literally drive our state forward. Let’s fine-tune our laws to ensure that consumers and businesses alike benefit for the long haul.