Texas lawmakers recently rejected a proposed law that would have allowed Tesla to open dealerships across the state.
The luxury electric carmaker was pushing lawmakers to reverse a state law that forbids manufacturers from directly selling to consumers. The bill did not get approval during the recent legislative session, the Houston Chronicle recently reported.
House Bill 3351 would have allowed car manufacturers to sell up to 5,000 vehicles per year at the manufacturer’s dealership. According to StateImpact Texas, Tesla CEO Elon Musk believes the company could sell 1,500 to 2,000 vehicles a year in Texas.
Musk has been adamant that the luxury brand needs to be directly available to consumers and not be forced into a franchise system.
“We’d be at the back of the bus,” he testified at a hearing earlier this year. “It’s a matter of life or death.”
Tesla owns two showrooms in the state that aim to introduce consumers to their models, but they stop short of selling vehicles. StateImpact points out that you can’t drive one or find out how much one of the vehicle costs at those locations, which are located in malls.
Tesla has been aggressive in trying to get similar legislation passed in other states. The company won court decisions in Massachusetts and New York and got legislation passed in Minnesota, according to Automotive News.
But it hasn’t been as lucky in states like Virginia or Texas.
The Texas Automobile Dealers Association, which opposed the legislation, told CNN that lawmakers made the right decision by not allowing the direct selling.
“Franchise laws give dealers the opportunity to have a much wider presence in the country, and they give consumers a better opportunity for purchase and service of their vehicles,” Bill Wolters, president of the Texas Automobile Dealers Association, told CNN.