Published on April 11th, 2014 | by Robyn Purchia6
Governor Rick Perry Supports Tesla Direct Car Sales
April 11th, 2014 by Robyn Purchia
Since Elon Musk’s announcement of the Tesla Gigafactory, Texas, Arizona, Nevada, and New Mexico have been in a race with each other to host the site. It’s been fun watching each state inch ahead only to be overtaken — at least in the news — with promises and offers from another. We previously put our money on a table in the Silver State. But then Arizona inched forward with personal invitations to Elon Musk, easy access to raw materials, and pending legislation to change the state’s franchise laws. And now it’s Texas’s turn.
Texas fell behind before because of its reluctance to permit Tesla sales directly to consumers — Tesla’s preferred business model. But Governor Rick Perry, a surprising ally to us environmentalists, has recently come out in support of direct sales. In an interview on Fox Business Network, Perry referred to the independent dealer requirement as ”old, and some would say antiquated protection in there for the car dealers” and said how the world is changing.
Perry said, “We live in a different world than we did 30 years ago, 10 years ago. I think it’s time for Texas to have an open conversation about this. . . . The cachet of being able to say we put that manufacturing facility in your state is hard to pass up.”
But the impetus for Perry’s support of Tesla isn’t just cachet — it’s cash. Although it would be wonderful to see the Governor support environmentally friendly vehicles, it’s Musk’s promise to build a $5 billion factory and create 6,500 jobs that has his attention. And that’s fine. Money makes the world go ’round as they say, and Perry’s support may help Tesla battle the powerful, entrenched, auto dealer lobby.
Auto dealers have already come out against any change in Texas’s laws, asserting that allowing Tesla to sell their vehicles would hurt consumers. “We would not change the law, because the franchise laws of this state protect consumers statewide,” Bill Wolters, the head of the Texas Auto Dealers Association, told CNBC. And President of the Dallas-Fort Worth Metropolitan New Car Dealers Association, Lee Chapman told the Dallas Morning News, “The system we have was put into effect by the state to protect consumers and dealers.”
In his interview with Fox Business Network, Perry disagreed with the auto dealers’ arguments, ”The people of Texas will say, ‘We don’t need to be protected. We like to be able to negotiate straight away.’”
Texas may be able to come to some agreement that satisfies both Tesla and auto dealers, like the legislation pending in New Jersey now. But it would be a while to even get there. The Texas Legislature only meets every two years — the next session starting in January 2015. And at this time, Perry has no plans to call a session of the Legislature to address the matter, according to the Austin American-Statesman.