Tesla's Attempt to Revolutionize the Auto Industry May Have Hit a Road Block in Texas
As they try to carve out a permanent niche in the ultra-competitive American car market, Tesla and billionaire founder Elon Musk have had to position themselves as sprightly Davids disrupting the lumbering Goliaths of Detroit and Japan.
They have no other choice. They can't afford the untold billions legacy automakers pour into engineering, R&D, manufacturing, marketing and distribution, and they don't have the scale to churn out millions of cars. To gain so much as a foothold, they have to fundamentally rethink the car business.
Musk was in Austin on Tuesday, where he testified in favor of proposed legislation that would help Tesla do that. Right now, Texas law requires that automakers sell their cars through licensed dealerships. HB 3351 and its companion, SB 1659, would let U.S.-based electric car makers sell directly to consumers.
The legislation is actually a bit more specific than that, limiting this ability to manufacturers who make only electric cars and have operated operated a dealership in the United States as of March 1, 2013. In other words: Tesla.
"For us this is life or death," Musk told the House Committee on Business and Industry, according to the Austin Business Journal. "If we can't go direct we will not be able to sell cars."
As mentioned, Tesla is small. It makes about 20,000 cars per year and thus would seem to pose little threat to the state's car dealerships, which sell about 1.3 million gas vehicles each year.
The dealerships don't feel that way. The Texas Auto Dealers Association is lobbying against the bill on the grounds that it would be unwise for the Legislature to change the law to benefit a single company, even one as undeniably cool as Tesla.
You don't have to be a policy wonk to figure out where lawmakers will come down on this issue. Will they side with the Texas-based business group that has contributed handsomely to many of their campaigns? Or will it go with the California billionaire who has given much less?
Not a tough call, the future of the auto industry be damned.