House Committee Gives Tesla Motors a Chance
Posted 4/30/2013 3:10:00 PM

The House Business and Industry Committee advanced a bill on Tuesday that would allow Tesla Motors to circumvent the state's franchise dealer system and sell cars directly to Texans, giving a shot in the arm to the company's efforts to operate in the state.

Tesla says an exemption from the franchise dealer system is the only way the company can operate successfully in Texas, but the owners of state auto dealer franchises have objected, saying the effort weakens a business model that has been key to their success.

House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin, was replaced by a committee substitute that offered auto dealers another layer of protection: If Tesla ever sells more than 5,000 cars a year in the state, it will become subject to existing regulation and must start to franchise its operations.

With Tesla projecting sales of only a few hundred cars a year in the state, the bill's supporters, including Diarmuid O’Connell, the vice president of business development for Tesla motors, called this a workable approach.

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Posted By: Producer Thomas  
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