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Texas regulations could kill bid for Tesla plant


Texas is one of four finalists trying to reel in Tesla Motors from California.  However, the state will not allow the company to sell its upscale electric cars directly to consumers because of long-standing state laws protecting and regulating auto dealerships according to the Texas Tribune.

Texas law requires manufacturers to sell their cars through tightly regulated franchise dealers. 

The Texas Automobile Dealers Association and its supporters say the rules protect consumers and ensure the livelihood of Texas auto dealerships, and that the state shouldn’t make an exception for Tesla.

There are two Tesla showrooms in Texas, but current state law prohibits employees from discussing the price or logistics of acquiring a car.  Buyers have to order the car from Tesla headquarters in Palo Alto, Calif.  The cars are delivered in unmarked trucks, per law, and customers even have to unwrap their new autos themselves because the law prohibits in-state representatives from doing, saying, or touching anything related to selling or delivering cars.

Diarmuid O’Connell is Tesla’s vice president of business development. 

“The issue of where we do business is in some ways inextricably linked to where we sell our cars,” O’Connell told Bloomberg this month. “If Texas wants to reconsider its position on Tesla selling directly in Texas, it certainly couldn’t hurt.”

More of this story from Jim Malewitz for the Texas Tribune can be found here.