"... Being named the Best State for Doing Business eight years running isn't easy, but when you provide an economic climate that stimulates innovation and not a crippling regulatory environment that stifles business, people notice.

Zero state income tax, low overall tax burden, sensible regulations and fair legal system are just the things Texas offers to get your business moving. So come to Texas – where Business Moves.

Welcome to Texas,

Governor Rick Perry"

That is, if, you are not a company called Tesla Motors!

Here is how to get around this hiccup. RENT cars by the Hour. Then, it is not a test drive or a sales pitch, just a "rental" business. And for a nice "in your face Texas Style" middle finger, run it out of the building mentioned below.

Steps from the Texas State Capitol, Space 500, 1108 Lavaca St, Austin, TX, in theTexas Automobile Association Building, may be available (Texas Auto Dealers Association has Suite 800). It comes with 14 parking spaces! Buy a Texas shell corp. to negotiate the lease, use the best Texas real estate law firm to spell out a contract they will learn to hate, complete with clauses requiring non negotiable penalties plus daily interest to ensure free and unobstructed access to the parking 24/7. Run your "rental" business out of the same building!

Too much fun!

Just trying to increase my shareholder value. I am happy to help with any other problems.



bp | June 4, 2013

Tesla has been selling cars and supporting customers in Texas - and in other states with dealership laws. It just requires creativity to workaround the laws that were set up to protect the dealerships from manufacturers selling directly to customers. This isn't anything new - and Tesla has known this all along, and is set up to provide sales and service support to customers in those states - it's just not as effective since they can't have a direct presence in those states.

While Musk didn't win the Tesla exception law this time around, he was able to get laws passed to provide support for SpaceX building a spaceport in south Texas.

Two years from now, when the legislature meets again - Tesla will have a much stronger argument for getting an exception to the dealership laws. By then, there should be many more customers - who'll be able to testify how the current laws harm Tesla's customers much more than Tesla - since Tesla has been operating without the exception.

Tojones | June 4, 2013

Texas protecting its oil fields? Sooo surprising. You are BIGGER than that.

PorfirioR | June 4, 2013

Someone suggested at today's stockholders' meeting that Tesla implement an incentive referral program for owners. I would suggest starting with Texas, North Carolina, and Virginia.

negarholger | June 5, 2013

The rental car is a good idea - unless there are "franchise laws" to prevent it. But rent it for one or two weeks only, because that is about the time it takes to not wanting to get back in the old car. As Elon said people will revolt, question is how to foster it.

L8MDL | June 5, 2013

Why not just put 100 miles or so on the cars and sell them on a "used" case lot with a "new" car warranty?

L8MDL | June 5, 2013

Case = car (and when will this forum get an edit function - not to mention search - and, yes, I know about Volker)

J.T. | June 5, 2013

Original posters have an edit option up top near the logo.

The forum will have search function probably the same time the music storage is available and the map points in the direcdtion of travel.

J.T. | June 5, 2013

I just sent an email to Joe Straus, the Texas Speaker of the House, to explain why Texas is stifling new industry for the private interests.

I know the answer, I'm just wondering how he'll explain it, if he answers at all.

Bubba2000 | June 5, 2013

Anybody from Texas here? I am just wondering if the ban on dealerships has any effect is stopping them from ordering a Model S. X?

I do not see why it is such a big deal, except for the test drive. Most magazines have done the test drive. The car can be seen in the show rooms in Texas... you can touch and feel. Service is available if needed.

Superraz | June 5, 2013

I ordered my Tesla Model S this week and I live in Dallas Texas.

I was not going to let the Dealership law stop me, but it definitely does make everything more complicated. Luckily, I got a test drive from a friendly Tesla owner which reaffirmed my choice in ordering a Tesla.

It was annoying, however, to go visit the Service Center and Galleries because the staff is not allowed to answer some of the technical and financial questions I asked.

Additionally... I am planning on doing Tesla Financing. Unfortunately, to accomplish this, while still having the car delivered to Texas, I will have to fly to Oregon to sign my paperwork (This is a huge hassle).

But Tesla makes such a compelling car, that all of the hassle is worth it for me. Hopefully these stupid laws will change soon!

Bubba2000 | June 5, 2013

Super, I am glad you were able to get around the restrictions in Texas.

It is worse in North Carolina. They are in the process of passing a law that bans e-mail, or other electronic communication with Tesla. This has gone too far.

Any lawyers in this board care to comment?

David70 | June 5, 2013

By getting the car in Oregon, are you going to be able to avoid Texas sales tax? Or does Texas not have sales tax? IMHO, it would serve Texas right to lose the sales tax.

bp | June 5, 2013

I received my car in Texas in January. I've heard the process has improved some since then.

Most of the problems were on Tesla's side at that time - they weren't very organized in sending the necessary paperwork - which came in multiple FedEx shipments - with no advanced warning - and no tracking information - the envelopes would magically show up at my front door - so there was more angst than necessary in the process, because Tesla didn't keep me informed on the status of the paperwork or when it was being shipped to me.

Overall, I've found the impact of not having a dealership in Texas hasn't been a huge problem:

Can't do test drives (at least so far) from the Tesla stores, though Tesla should be able to offer periodic test drive events to workaround this.

Can't purchase car directly at the Tesla store - not really a big deal, since it's easy to order the car through the website.

Delivery is done to your house - not at the dealership - again, not a big deal, and actually was pretty cool to have the truck roll up to the house - and have the car delivered there - rather than having to go to a dealer.

Registering the car requires a few extra steps. This doesn't slow down the ability to drive the car - just requires one or two trips to the county tax office to pay the sales tax and get the temporary & permanent plates. Again - this really wasn't a big deal - and not much different than what you'd do if you were buying a used car.

Can't contact the service center directly - all calls are routed through Tesla HQ. This is a little annoying, but so far hasn't been a big deal.

Bottom line - it is a little inconvenient not to have a dealership for Tesla - but Tesla can still do quite a bit on their end to minimize the issues. And now that I've had the car for a few months - all of these inconveniences are inconsequential compared to driving the Model S everyday!

Superraz | June 5, 2013

By getting the car in Oregon, I can still accomplish the Tesla Financing and still allow the car to be delivered to the service center in Dallas texas without any extra delivery fees.

I am not sure how the tax situation will work, but I will post my process on here.

In the meantime I am going to be fighting and doing anything and everything I can to help Tesla's situation here in Texas. There must be some way to beat these scumbag car dealerships!!

Brian H | June 6, 2013

Tesla has no dealers. Anywhere. There are stores, galleries, and service centers.

bp | June 6, 2013

Correct - Tesla doesn't have a dealership in Texas - and the lack of having a dealership in the middle hasn't been a major problem in either purchasing or servicing my Model S.

SamO | June 6, 2013

It's all about the TEST DRIVE.

Elon says that 25% of all test drives turn into orders, therefore, not having Test drives in Texas, VA, NC etc WILL reduce orders in those states.

It's not about delivery, ordering etc.

edwademd | June 6, 2013

What are the plans for adding a supercharge station between Houston and Austin?

Brian H | June 6, 2013

Tesla doesn't have a STORE there. Stop with the "dealer" terminology. A dealer is an independent businessman selling product. There are no Tesla dealers, anywhere in the world.

Teslation | June 6, 2013

+1 On the rental idea.

Also like to see a private test drive club in NC. They seem to be going power crazy there. At some point NC will/have overstep/ed the Constitution.

A good place to start with a law suit is also NC. I mean barring e-communication ? What happened to Freedom of Association ?

How about a, NC Buy A Tesla Vacation Package ? Tour the factory, test drive the car, do purchase and delivery paperwork, see other tourist sites like Disney, humpback whales , Hollywood Studios, Universal/Paramount Park, Venice Beach, etc.

Hold Test Drive Private Teslas and Petition Rally/s at NC state Capitol. Great publicity ! This is what your State Legislature is trying to protect you from , the world's greatest car ! The best buyer's experience and customer service in the industry ! Etc, etc.

Have Elon visit the one of the NC Tesla Test Drive & Petition Rallies at the end of his national, supercharger, cross country, family vacation to greatly increase publicity.

Elon could meet with supporters, and in my opinion, create great world wide publicity ! Elon could talk to locals about how they feel about the NC pending law and if the NC public agrees with it, ask locals what they would like him to do about it. Then try to meet with NC legislators about the issue hold a press conference etc.

Benz | June 6, 2013

I have an idea which I would like to share with you guys.

A number of people who live in the state of Texas already have bought their Tesla Model S. In fact they use it already. What if these local Texans would help Tesla Motors to realise test drives for new customers?

I don't know how many people in the state of Texas do already own a Tesla Model S. But I can imagine that a number of people would not mind doing that. In fact this is already what is happening today (owners let their friends, family, neighbours etc. do a test drive in their Tesla Model S).

The shop/gallery is to educate new customers. And test drives can be realised via existing owners of a Tesla Model S.

And you know what, when a person does decide to actually buy a Tesla Model S, then the existing owner could get $100 from Tesla Motors for having done the test drive. How about that?

There's nothing illegal about that, is there?

dollardragon | June 6, 2013

The Commerce Clause in the US Constitution could help in this situation.


"North Carolina's Threat To Tesla Likely Unconstitutional"

Gerald R. Bodisch, Economist, Antitrust Division, U.S. Department of Justice, wrote a paper that advocates eliminating state bans on direct manufacturer sales in order to provide automakers with an opportunity to reduce inventories and distribution costs by better matching production with consumer preferences titled "Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers"

Jason Sorens,Ph.D (Yale), currently teaching at University at Buffalo (SUNY) , writes about this very subject in "Interstate Protectionism and the Dormant Commerce Clause"

If Tesla sues in federal court, it should be an interesting show, as they will probably acquire an odd assortment of allies merely on the principle of the matter, that, protectionism has no place in a free market. Unfortunately, car dealers are mostly members of the "1% Club" and combined wield hefty clout wherever they choose to focus their interest. Consequently , it will be an expensive fight.

Therefore, It will be important for those of us, who believe in Tesla as more than a company, but as a cause or symbol of how things should be, to rally alongside and be supportive in whatever way we can. And for those who just think it is a great future investment and who are just out to make a ton of money, they should protect their investment by doing likewise. Further, if one is just a customer you can cover your butt by helping too.

jongable | June 6, 2013

I think Tesla should accept that the dealer associations in these states are going to resist Tesla selling direct. Find people who like us believe in the Tesla model enough to invest for the first time in opening a car dealership. Then they are not hurting their other car lines by selling Tesla they only want to sell Tesla. These would be truly independent dealerships and comply with the laws in these states, right? Having a middleman will either hurt profit margins or increase the cost to the buyers unfortunately but it is better than writing those states off. With a well thought out franchise agreement Tesla dealerships could be partners in these states to help work around the laws while maintaining the Tesla store experience.

TI Sailor | June 6, 2013

Somewhat OT, but relevant:

I seem to remember when McDonald's was mostly represented by franchisees. Although their contracts required use of McDonald's supplied potatoes, etc, there was a lot less control of prices and service. This non-uniformity led to QC problems which McDonald's chose to address by building and running new restaurants themselves, and not renewing franchise agreements. However, some franchisees have very long contracts, or are in small markets, and are still in business. One such restaurant is in my city. They do not honor many (most?) coupons or other nationally advertised sales. $1 coffee, any size? Not going to happen.

IMO, auto dealers aren't really worried very much about Tesla, at least in the short-term. They're worried about the manufacturer(s) they represent. As suggested, most manufacturers would make more money and provide better service if they didn't have a zillion dealers representing their products.

holidayday | June 6, 2013

jongable: I think Tesla should accept that the dealer associations in these states are going to resist Tesla selling direct.

I disagree. The dealer associations are wrong. They will be shown to be in the wrong, publicly and embarrisingly, if this goes to the Supreme Court (due to Commerce Clause).

Tesla knows it is in the right. Customers know Tesla is in the right. Dealers are trying to protect a 20th century model. And they will fail.

And the people will rejoice. :)

jongable | June 6, 2013

I agree that the dealer associations are wrong. It's bullsh!t what they are doing, but courts and legislatures move very slowly and can be bought. Tesla wouldn't have these problems if it were not for the lobbyists of these dealer associations. Rather than waste time fighting the system comply with the right partners and move on.

bp | June 6, 2013

Tesla does have stores in Houston and Austin, where you can purchase Tesla products - you just can't order cars from them - but you can purchase Tesla accessories. The rest of the state doesn't have any stores at all - and that's not preventing people from buying Model S...

Having purchased cars through dealers - and direct from Tesla online - as long as Tesla fixes the problems in the registration process (which I believe they've done since I got my car in January) - the dealer issue really isn't a big problem.

While the legislature didn't pass an exception for Tesla from the dealership laws - the status quo isn't too bad - and won't prevent Tesla from selling many cars in Texas - and the next time the legislature meets in two years, Tesla will have a large group of owners to help them lobby for change.

Mel. | June 6, 2013

Bp, why do you want Tesla to fix the problems of the government of Texas?

Pungoteague_Dave | June 6, 2013

TI Sailor,

McDonalds is still almost exclusively a franchisee-run store model. More than 85% of McDonalds are franchises, with most of the rest taken back temporarily while McDonalds finds new owners. McDonalds is very tight on its franchise supervision process so everything is standardized. Virtually all national restaurant chains have found that dealing with local health and licensing regulations is best left up to local owners. No significant exceptions.

TI Sailor | June 6, 2013


Thanks for the correction. My information was obviously mistaken. Made sense, but wrong.

Bubba2000 | June 6, 2013

Looks like Texas is a case of "Don't ask, don't tell". Tesla can not set-up stores for direct sales, and test drives. Still, Tesla can sell to Texans and the status quo can continue till 2015. The situation in NC is malignant because they want to make it illegal to communicate via e-mail, even telephones (electronic means), and prevent buyers ordering from NC.

Tesla can not afford to spend $100M fighting the NADA in Federal Court. Tesla needs to complain to Department of Justice and let them go after NC. That is what taxpayer money is for. Elon has enough political juice to get that going.

Regardless, Tesla can use asymmetric methods to sell in places like NC. Set up stores right across the border.

Mel. | June 6, 2013

Bubba2000, come on, the dept. of justice?...

bp | June 6, 2013

It was Tesla that tried to get an exemption from the Texas dealership laws - but there were only a small number of Tesla owners at that time to testify on behalf of Tesla and how the current laws impact Tesla's customers.

Next time around, when legislation comes up to get Tesla and their customers some relief from the dealership laws - there should be many more Tesla owners - who can lobby their representatives - and show up en masse with the bill is up for consideration in committee and in the house and senate - and those owners should have much more impact than what happened this time.

Brian H | June 6, 2013

I hear there were about 45 testified for Tesla, and only 5 against (all dealers, I expect). But campaign contributions won (bought) the day.

negarholger | June 6, 2013


I disagree - the franchise laws were created to protect single brand independent dealers from the manufacturer of the same brand to unfairly compete in a local area.
Now the NADA tries to pervert these laws to shield brand dealers from any outside off-brand competition - the judge in NY said it very clearly.
It is time for the dealers to add value to the process or disappear. In TX some dealers even said to go with the time and re-think their business process. It not that Tesla tries to do everything - have an accident and they will send you to a qualified body shop.
In most countries cars get ordered and delivered... you do not buy from a big pile of cars on a big lot. In the US that was maybe justified 50 years ago, but with today's logistic it is simply outdated and adds cost - the only person who can pay for it you... yes, you personally, there is nobody else to provide the green.

Benz | June 7, 2013

There is a difference, if we compare 2013 and 2015. What do I mean? Well, the number of Tesla Model S EV's currently driving around in the state of Texas is not really a high number. That should be different in 2015. So, in the next 2 years, a great many Tesla Model S EV's need to be bought by people who live in the state of Texas. How can we do that? I think that the people who already have a Tesla Model S, should step forward and do all they can to promote this wonderful EV. They need to convince people in their neighbourhood and in there cities to buy a Tesla Model S. They should drag people in their Tesla Model S and let them do a test drive.

How many people in Texas currently do own a Tesla Model S?

bp | June 7, 2013

Tesla should organize a Get Amped event in Austin - and send invitations to the legislators and their staffs plus the staffs of the Governor and Lt. Governor to participate.

The combination of personal experience with the car, coupled with a growing number of Tesla owners demonstrating how the dealership laws don't hurt Tesla's ability to sell cars - but does make it more difficult for customers to get support - may improve chances for approval next time.

And, no matter how many cars Tesla is selling in Texas - with only a single plant, it'll be difficult for the dealership association to make a case that allowing Tesla to sell direct would have a significant impact on their businesses.

In the Houston area, a founder of one of the largest dealership groups wrote an editorial in support of the Tesla exemption - so not everyone involved with the dealerships is in opposition of giving Tesla a chance to succeed.

Benz | June 7, 2013

@ bp


That is a good idea to start with. And it sure will draw some attention from the media as well. Which is Always good for Tesla Motors.

frmercado | June 7, 2013

I say that they take this to Federal Court as Elon said. Going from state to state trying to get them to pass a bill or suing in a state court for something that is inherently unconstitutional and almost certainly goes against Federal Antitrust legislation is not very efficient. Plus, why wait another two years to have something that is so wrong fixed by the same people that got you into that mess?

People here are going about this the wrong way, people should not be fighting to have new legislation passed to protect Tesla. They should be fighting to protect EVERYONE (all citizens of Texas and America) and to have backwards, pro monopoly, anti business legislation ABOLISHED and to seek penalties for those who seek to impose or perpetuate a monopoly and unfair business practices in the great state of Texas and in the America.

frmercado | June 7, 2013

Typo. America not the America.

bp | June 7, 2013

Existing legislation protects the dealerships - and harms customers purchasing products from Tesla (the dealership laws don't prevent Tesla from selling cars - they just can't do it directly from a store in the state).

New legislation wouldn't protect Tesla - it would exempt Tesla from the dealership laws - and provide Tesla's customers better support within the state, without having to deal with Tesla indirectly.

Benz | June 7, 2013

Maybe it's too expensive to take it to the Federal level?