Texas could enact legislation to stop Tesla from repairing its own cars – Quartz

Texas likes to play with Tesla. The Lone Star State has long blocked Tesla's attempts to sell cars there. Since 2013, Texas lawmakers have refused to take four bills allowing the direct sale of cars in the state (rather than requiring the builder to rely on dealers). To silence the knife, Texas also prevented Tesla buyers from receiving the state's incentive to pay $ 2,500 for alternative fuels because these vehicles are not sold at dealerships.

Now, Texas wants to prevent Tesla from also repairing its vehicles. Electrek introduced a new bill (SB 1415) that would prevent Tesla from repairing cars in its own service centers. Republican Senator Kelly Hanbad's proposed law amends the wording of the state transportation code to prohibit vehicle manufacturers from "repairing" and "repairing" cars. This would hamper Tesla's attempts to expand in that state, one of the largest auto markets in the United States, at a time when Tesla was saying it wanted to make service and parts supply a top priority.

The electric car maker has 13 stores or galleries in Texas, one of only two states to block manufacturers' direct sales. Tesla employees at these sites can not talk about prices, orders or car sales. All transactions must be done online. In 2017, Tesla spent at least $ 1.2 million lobbying Texas lawmakers to change that, but nothing could match the mbadive political donations raised by Texas' 1,300 dealerships, major players in State policy.

The stake is a battle of money. Car dealerships derive a large portion of their revenues from sales and (especially) vehicle maintenance. Tesla's direct sales and service stations pose a threat to this business model because they exclude dealers from the transaction.

The Texas Automotive Dealers Association opposes this representation. He argues that (pdf) Tesla is seeking a special exemption from state rules requiring franchisees to sell retail sales. The regulation, developed in the 1930s, "prevents monopolies and promotes competition in the pricing of vehicles and services," says the badociation. But this arrangement is mainly the result of lobbying and protectionism. As Quartz has pointed out, car manufacturers can not do without intermediaries (dealerships) to help reduce the approximately 30% of the costs of a car currently spent on distribution. According to experts, this arrangement curbs innovation and artificially inflates costs by forcing all sales to go through dealers. The US Federal Trade Commission has stated that similar laws favorable to dealers in Michigan "were likely to harm competition and consumers"