clock menu more-arrow no yes

Filed under:

Tesla loses fight with dealers to sell its cars in Texas

New, 125 comments

Tesla doesn't just make unique cars — it has a pretty unique way of selling them, too. The company handles sales directly, meaning there are no dealerships. And as you might expect, powerful auto dealers across the United States are not a fan of that business model. Unfortunately for CEO Elon Musk, it appears he's just lost a political battle in Texas over the right to sell Teslas there.

The Texas State Legislature has failed to vote on two separate bills that would have allowed the electric car company to sell its cars directly to customers. The bills were designed to bypass an older, dealer-backed law on the books that prohibits manufacturers from direct sales. Such laws exist in a number of states, such as West Virginia, Arizona, Connecticut, and Michigan. Musk successfully lobbied to have a similar law reversed in New Jersey, and he was attempting to pull off the same feat in Texas.

According to Bloomberg, Musk has hired as many as 20 lobbyists in Texas, and has made upwards of $150,000 in campaign contributions just this past in support of the effort. But auto dealers wield a great amount of political power, and the measures failed to even see a vote, reports Bloomberg. That means the next time it will have a chance will likely be in two years, when the state legislature will hold its next regular session.