Tesla's desire to bypass car dealerships and sell its electric cars directly to consumers is running into roadblocks in Texas and other states.
Tesla operates two "galleries," or showrooms, in Houston and Austin, but the state regulations mean that employees there can't discuss how much the cars cost, offer test drives or even refer customers to another store out of state. Texans can buy a Tesla online but would have to arrange for delivery through a third-party shipping company.
Texas is among a handful of states that either have on the books or have considered franchise or consumer laws that make it difficult — some say nearly impossible — for Tesla to bypass the local car dealer and sell directly to consumers. Tesla says Texas has the most restrictive auto dealer laws.
Dealers say the traditional franchise system benefits car buyers because it creates competition between dealerships selling similar products.
Bill Wolters, president of the Texas Automobile Dealers Association, said it would be foolish to grant Tesla an exemption to the state's franchise laws.
"If we made an exception for everybody that showed up in the Legislature, before long the integrity of the entire franchise system is in peril," Wolters told ABC's "Nightline."
Tesla CEO Elon Musk counters that customers don't like dealing with the traditional middleman salesperson and says dealers are prejudiced against electric cars.
"It takes them at least twice as much effort to sell someone an electric car and to educate them as to why an electric car is good," Musk told "Nightline." "And so if we were to go through the traditional dealer path, the result would be a disaster."
"Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business," Tesla spokesman Patrick Jones told MSN News via email.
In June, Tesla successfully fought a proposed bill backed by car dealers that would have blocked sales in North Carolina. The upstart California company also scored a victory in New York, where lawmakers tabled legislation that Tesla said would have forced it to shut operations in that state.
A few months earlier, Tesla won a similar victory in Minnesota.
Tesla is also trying to rally public support.
A petition urging the Obama administration to allow Tesla to sell its cars directly to consumers in all 50 states has attracted more than 115,000 signatures — enough to require an eventual response from the White House.
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