Texas law keeps Teslas made in the state from being sold directly to Texans

AUSTIN, Texas (KEYE) — Following Elon Musk’s announcement of Tesla’s headquarters coming to Austin, questions surround the process of buying a Texas-made Tesla.

Under Texas franchise laws, consumers can only buy cars from auto dealers and can’t buy them directly from automakers.

As it stands in the Lone Star State, Tesla’s company-owned outlets can’t legally sell a Tesla in Texas.

For Matt Holm, the Tesla enthusiast has been advocating for changing the law since at least 2013.

With two Teslas in his garage and three on the way, two cyber trucks and a roadster, he’s the founder and president of the Tesla owners club of Austin.

The club started modestly shortly after Tesla electric vehicles were made available to the public with just 10-20 friends, but after a legislative hearing in 2013 to change the state law to allow automakers to sell directly to consumers, the club grew as did the popular electric vehicle.

Holm said Tesla asked him to come to the Capitol in support of the legislation. He sat behind Elon Musk that day.

“He left an impression, right? Amazing person doing great things,” he said.

Since that day in 2013, there have been nearly a dozen special sessions since then. Still – the law in Texas stands.

Tesla can’t sell its cars directly to the public.

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Elon Musk tweeted about it in May.

In the most recent regular session, a bill that would have essentially allowed Tesla to deliver electric cars in the state was crafted to allow automakers to sell directly in Texas if they solely built battery-electric vehicles and never maintained franchised distributors.

The bill was heard in the committee but failed to gain traction by the deadline.

The Texas Automotive Dealers Association sent a statement regarding the law that keeps Tesla from being bought directly in Texas saying, “TADA firmly believes in the franchised system of dealerships and would welcome the opportunity to work with any manufacturer. The franchised dealer system ensures competition and protects consumers. Clearly by the number of Teslas on the road today, if a Texan wants to buy a Tesla they can,” said Spokesperson, Jennifer Stevens.

Holm described buying a Tesla as “refreshing” compared to a traditional dealership. He said he picked out what he wanted online and it was shipped to him from California.

He feels by the time the Gigafactory off SH 130 is done, prospective Tesla buyers won’t have to jump through the hoops he did get a car.

“To take these and put them on a truck and take them out of state, then bring that back like some people are thinking. It might be possible but that would be nonsense. I’m sure there will be a work around where they are delivered here and registration will happen elsewhere,” said Holm.

St. Edward's political science professor Brian Smith said auto dealers have given big money to top state lawmakers to keep the law the way it is.

“Dealers have a bit of a monopoly going and they don’t want to change that,” said Smith.

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Smith said with more buyers looking to buy cars online instead of a traditional dealership paired with Elon Musk investing billions in Texas to relocate the headquarter in Austin – lawmakers will answer how important Tesla is to the Texas economy in the next legislative session.

“For Musk to change (the law) he has to present an alternative that says the small business model is not good for Texas and direct to consumer is and that will be an uphill climb,” said Smith.