Texas Isn’t Open for Tesla’s Direct Auto Sales, Abbott Says

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Texas Governor Greg Abbott said that Tesla Motors Inc. shouldn’t expect to open Lone Star state sales outlets any time soon.

Tesla has been trying for two years to crack the nation’s second-largest automobile market. It has been stymied by a powerful dealership lobby that opposes allowing the company to sell its electric cars directly to consumers.

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” Abbott told Bloomberg Radio on Tuesday. “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.”

For years, Tesla has been working to roll back state laws across the U.S. to allow the company to sell its $100,000 vehicle without a traditional dealership. Tesla decries the system as an unfair monopoly. Auto dealers say the practice protects family-owned businesses and their customers.

Ricardo Reyes, a spokesman for Tesla, said the company has four maintenance centers in Texas that have earned high marks for service. He said doing business in the state is a matter of when, not if.

“We look forward to working as a business in Texas,” he said. “It’s just a matter of time.”

Tesla has had success in Georgia, Maryland and New Jersey, where lawmakers this year allowed direct sales.

Currently, Texans who wish to own a Tesla can visit one of three “galleries” in major cities to view the cars, but they can’t test drive them or discuss price. Prospective owners must go to another state or order online and have a car shipped to them.

Courting Texans

Tesla has tried hard to win over Texas. Co-founder and chief executive officer Elon Musk visited Austin lawmakers this year days after the legislative session convened in January. He also hired 20 lobbyists and spent more than $150,000 on campaign contributions.

Musk’s efforts fell flat. Pro-Tesla bills gained little traction, failing to make it out of committees for a full vote by the House or Senate.

Tapping the Texas market is key for Tesla. Texans buy more than $81 billion worth of cars every year, second only to California, according to the Virginia-based National Automobile Dealers Association.

Teslas compose only a fraction of cars on Texas roads. Of the 78,000 Model S vehicles on roads worldwide, only about 3,000 are in Texas, according to Tesla.

Tesla isn’t giving up. The company’s vice president of business development, Diarmuid O’Connell, said this year that the company will continue to work at swaying lawmakers before the next regular legislative session begins in 2017.

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