For a while there, it seemed like Tesla could do no wrong. But despite repaying its Department of Energy loans early, surging stock prices and even announcing a vast network of proposed Superchargers, Tesla is still in the fight of its life for how to get its cars sold.

According to Automotive News, the startup EV-maker lost its second straight battle to sell cars in dealerships that don't conform to state franchise laws restricting factory-owned dealerships. Earlier in the year, Tesla failed to get a dealer license in Virginia, and this time around, it will have to wait until at least 2015 to fight for an exemption in Texas. This means that Tesla's Houston and Austin showrooms are not actually allowed to sell vehicles. The report also adds that Tesla CEO Elon Musk could end up taking his case to the federal courts.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 252 Comments
      fridintl
      • 1 Year Ago
      I hope while the rest of the world will appreciate and enjoy the worlds most advanced and enjoyable car experience ever, the people will rise up in those states that won't allow them to have them. Screeming freedom and then hide behind the big dollar, what else is new.
        xessexcva9
        • 1 Year Ago
        @fridintl
        Think of it this way. If you lived in an area large enough to support say 5 dealerships, and all five dealerships are manufacturer owned, what kind of deal are you going to make on a new car. There's no incentive (or permission) to sell for less than a brother dealership is there. Company stores are NOT a good idea. If there is a quality product available, and a demand for it, free enterprise will make it happen. It takes a lot of money to open a dealership. People with the money to do this are not stupid, or they wouldn't have money. Why invest in a maybe, when you could open a Chevrolet or Ford dealership and succeed. I have no problem with anyone who wants an EV. I don't. I want a V8, rear wheel drive.
      Andy Gomez
      • 1 Year Ago
      Free market? Doesn't seem like it here. Dealerships aren't necessary. If a buyer wants that choice, let them have it.
      Cheryl
      • 10 Months Ago
      LOVE this car. With the green government incentives and gas cost savings it is not that far from reach. I will just need to work a bit harder.
      DZ and DL Ideas
      • 10 Months Ago
      The independant bisiness owners of America will back Tesla for inclusion into nationwide sales.
      Cheryl
      • 10 Months Ago
      I love the vehicle. There are opportunities to test drive often in Houston. This seems to be a company that really is forthcoming with the few vehicle issues at least from what I have been watching. I am disappointed. Instead of just complaining, I will do some local and state research and find out what more about the matter. Perhaps jingle the not pushy sales guys at the Galleria and find out more information. To each his own but I think the car is pretty awesome and if you look at the numbers (gas savings) and the government incentive it is not that far from reach. I will just have to work harder. (no I am not a sales person)
      thatguyyouknow
      • 1 Year Ago
      These comments are ridiculous. He should have taken it to federal court to begin with. Would you rather the money go to the rich auto dealership owners, or the rich car manufacturers. Your argument is circular and holds no water. The fact of the matter is, not allowing a dealership to sell directly to the public in cases like this (i.e. car companies, furniture companies) expands the job market by having a dealership set up autobody, auto mechanic, and sales positions, not including all the other countless positions needed to run a car dealership. Allow the auto makers to sell to the general public, and you not only allow them to create a monopoly, but you stifle any job creation that could come of it. Put yourself in the shoes of other Americans who make their living selling cars, or working for a dealership. If we all followed Tesla's model, cars would be sold out store fronts, with no personnel. While it is true that he would need to expansive help with setting up and running websites, phone calls etc. in this day and age it would not take nearly the amount of people to do this as it would to run a dealership, so in essence, you're all in support of eliminating jobs and allowing one single person to bypass laws that all the other "big money" men have to follow. You're allowing Elon Musk to skirt the system and fatten his bottom line, good job guys, you're really thinking this through.
        masteraq
        • 1 Year Ago
        @thatguyyouknow
        Even with direct sales, they will still need to create jobs to carry out sales and service. Factory ownership doesn't decrease that need. In fact, if the auto manufacturers owned the dealerships they would probably pay better than the independent dealerships. For example, Apple Stores pay their employees much better than Best Buy.
        spannermonkeyuk
        • 1 Year Ago
        @thatguyyouknow
        Your argument makes no sense, either. Would private dealerships really add many more jobs than manufacturer owned ones? Because they're inherently less efficient? Not a good reason to make this happen. Also, no-one is automatically entitled to a job. It's supposed to be one of the founding tenets of this country that you make your own way in the world. You shouldn't need government mandate to force someone to give you a job.
        big daddy
        • 1 Year Ago
        @thatguyyouknow
        Let the American public decide if they like the business model or not.
        • 1 Year Ago
        @thatguyyouknow
        [blocked]
          Zoom
          • 1 Year Ago
          Stop blaming the salesmen. Blame their managers. Salesmen don't make a lot of money; minimum wage in some states, just commission in others. The real profits go to the dealership owners. Until they start paying to offer good sales service, we'll get what the dealership owners think we deserve.
        krona2k
        • 1 Year Ago
        @thatguyyouknow
        But what about the free market, don't you love that?
        m_2012
        • 1 Year Ago
        @thatguyyouknow
        Tesla wants dealerships, just not under the crooked existing laws. Of course he knows he needs salespeople and body shops; the dealerships will have that. Do you enjoy buying from a dealership that essentially has no loyalty to the brand or control over what it can sell? I want to buy a Tesla from a Tesla dealer owned by Tesla. The days of buying a Ford at a dealership owned by Derp E. Derp and not Ford should be long gone!
        autohobbyhorse
        • 1 Year Ago
        @thatguyyouknow
        I don't think you're thinking your own argument through. As if Tesla wouldn't set up their own dealership with EVERYTHING exactly like that of a franchise dealership. The only difference is that employees would work for Tesla, not the franchisee. Tesla wants to cut out the middle man. And honestly, if the middle didn't have such a sour reputation for for being absolute sleez balls, there might be more support for the franchisee in the general public.
        Vincent Jan Goh
        • 1 Year Ago
        @thatguyyouknow
        Yes, by all means. Let's insert middle-men into the industry for no reason. Let's create jobs on the backs of consumers. Just because the dealership model exists, it doesn't mean that it's good or desirable. Let Tesla sell the cars on their own, and if consumers don't like that model, they don't have to buy from Tesla. On the other hand, maybe people are sick of car dealerships and the people that run them. Dealers shouldn't be guaranteed their existence. I don't see any reason why the government should guarantee that a particular business model exists at all.
        Scooter
        • 1 Year Ago
        @thatguyyouknow
        All the cars are already made in or heavily sourced from foreign markets, the U.S. jobs argument got tossed out the window in 1990s. How many salesman are selling a vehicle they can't even afford to buy?
        Erik Goossens
        • 1 Year Ago
        @thatguyyouknow
        If Elon Musk can "fatten his bottom line" by having his own stores, even taking into the account the added costs of running all its own stores and paying the staff for those stores and running the service operations, that means Elon is doing things more efficiently, which means Tesla can charge less for their cars (while still keeping a healthy margin), increasing demand for those cars, which is a good thing. Those consumers can then spend that extra money on other things, creating jobs for other things. But what about existing dealerships, who in good faith have spent their own hard-earned money on setting up their businesses? Fine, protect those - it's not efficient, but it's fair, and THAT'S what the laws were intended to do. Let the Ford dealership be protected from Ford selling direct to consumers. Let the Tesla dealership... wait a minute... there ARE no Tesla dealerships! There's nobody that needs protection. Telling the Ford dealership that they have no right to stick their fingers in the Tesla-selling business has zero impact on their business of selling Fords. The dealership organizations crying foul are just greedily trying to get a slice of a NEW pie to which they have no right. Your argument about monopolies also doesn't make sense. Ford's the only maker of Ford cars... there's nothing to prevent them from charging a higher wholesale price to the dealerships - the manufacturer is still a monopoly in the end (over their own brand). Ford above is just an example. Replace with the name of any other automaker.
        Todd Fleming
        • 1 Year Ago
        @thatguyyouknow
        I don't get it your comment, were suppose to now care? No one stood up for me when my industry was shipped out, guess what, it sucks welcome to the club. I DO NOT want to pay a penny more than I need to for a car, and the dealership sure has that in mind for me. I find it funny that people get all upset that finally their industry is taking a hit, where were you when steel mills were shutting down, oh that didn't concern your job did it? What about the massive IT offshoring, again not car sales, eh? This is the fact of life now, I know it sucks, but hey everyone wanted this right?
      GR
      • 1 Year Ago
      Ugh. On behalf of my home state, I'm sorry America.
      manure
      • 1 Year Ago
      The dealers are acting like a Mafia. It is none of their business what customers and Tesla Motors do with THEIR money.
      FX2fowheel
      • 1 Year Ago
      And all I hear is 'keep government out of business' What wrong with a little capitalism and competition Texas?
        thatguyyouknow
        • 1 Year Ago
        @FX2fowheel
        You're insulating ONE PERSON, from a law that all others have to follow, if they don't like it change the law. that's not competition its favoritism.
          Erik Goossens
          • 1 Year Ago
          @thatguyyouknow
          It's not insulating ONE PERSON, it's insulating "any company that hasn't bought into the dealership model yet". If as a carmaker you've profited from the dealership model in the past (by not having to deal with all the overhead of aftersales operations), it seems just and right that you have to stick with that model, and not be able to undercut those who took on that risk. If, as a car manufacturer who HAS NOT bought into (and profited from) the dealership model in a particular state, you shouldn't be forced to adopt that model of selling cars, because you're not hurting anyone's *existing* business. McLaren, for example, doesn't have a dealership in North Dakota. If it so wished, McLaren should be able to open it's own store in North Dakota, because it's not undercutting any existing independent McLaren dealerships (same doesn't hold true to Texas, where it does have dealerships). Tesla, similarly, doesn't have any existing independent dealerships in Texas. Opening it's own stores in Texas wouldn't undercut existing Tesla dealerships, because there aren't any. This should be allowed.
      ferps
      • 1 Year Ago
      This must be what Republicans mean when they talk about "economic freedom."
        EZEE
        • 1 Year Ago
        @ferps
        A bill to let tesla sell cars was introduced by a republican...
        Grendal
        • 1 Year Ago
        @ferps
        EZEE is right. The Dealers Association are buying both sides of the aisle. Their arguments are: It's not fair. Protect our business and jobs. What they don't tell the politicians is that Tesla is selling a different product that does the same thing.
      Zoom
      • 1 Year Ago
      I hope Musk does take it to the Federal courts. They could rule it's a state issue, but with e-commerce and selling across state lines made easy these days, I think it is a federal issue. Perhaps Tesla will just be allowed to sell direct via the internet. Fine by me.
        m_2012
        • 1 Year Ago
        @Zoom
        Me too. I hate stealerships and the protectionist systems they have set up. Go Elon - take down big oil and stealerships all in one swoop!
      Scooter
      • 1 Year Ago
      Tesla buyers aren't searching for deals of the month, or gimmicks, when your going to a Tesla showroom to buy a Model S, simply put...your buying a Model S. What's bad about that? No dealer there to offer you trim packages and add on warranties? Nobody to spray ScotchGuard on your seats and charge you $75 for it? No more paint protection package that's a actually a coat of NuFinish?
        express2day
        • 1 Year Ago
        @Scooter
        Only because Tesla is operating in a very narrow, unique part of the automobile market right now. As soon as Teslas (or EVs) become much more commonplace and Tesla faces much more competition, they will end up more and more like everybody else - trying to find ways to eek out extra profits, cut costs, etc. because their cars are no longer as unique as they used to be. With separately owned dealerships, if one "ABC" dealer tries to sell you something you won't want (e.g. $75 ScotchGuard) you can try another "ABC" dealer but under a Tesla monopoly-like environment that next Tesla dealer will be doing the same as the first Tesla dealer because they are controlled by the same "entity."
        MacProMan
        • 1 Year Ago
        @Scooter
        you really think Tesla won\'t offer those add-ons just the same?
          m_2012
          • 1 Year Ago
          @MacProMan
          Likely no. They will build them right and price them correctly to ensure profit and future growth. If it needs paint protection, then it will come with an engineered solution right from the factory. If it needs a longer warranty, then it will come with it. Pick your color, pay the price, and enjoy your car. Speaking of, have you seen the paint on a Model S? Its gorgeous and flawless in person. Best OEM paint I have ever seen.
          Letstakeawalk
          • 1 Year Ago
          @MacProMan
          ...and Tesla doesn't want to lose their mark-up either. At the moment, they keep every penny of the retail purchase price, and if they were to follow the traditional dealer model, they'd have to take the wholesale value.
          raktmn
          • 1 Year Ago
          @MacProMan
          No, Tesla does not sell ScotchGuard or Nufinish bogus junk at all, much less say it has already been done, so you are forced to buy it. What you see at their website when you order is what you get.
          MacProMan
          • 1 Year Ago
          @MacProMan
          hope you guys are right, I don't like the games some sales people and dealers play but then again the customers often don't know how to negotiate and have uneducated/unrealistic expectations on pricing. sticker price only sales for tesla would make it easier on everyone.
    • Load More Comments