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Don't exempt Tesla from motor vehicle franchise law
As automobile dealers in San Antonio, we compete for business every day. We have to be competitive in our pricing, we have to offer good service, we have to be available for repairs or recalls, and we have to continue to earn trust to stay in business.
There are automobile dealers across Texas in 300 communities doing the same thing we do every day. These dealers are often the major employers in the area and the major benefactors for the local hospital, schools and little leagues. And collectively, we are a powerful economic engine, pumping billions through the economic system of our great state.
Like most Texans, we understand the excitement and allure of bringing any new manufacturing plant and the many jobs associated with it to Texas. We believe the dynamics of the state's business climate sells itself with this regard.
But, we caution against jumping to the conclusion that supporting these new innovative cars requires being opposed to a system built to protect consumers. The motor vehicle franchise laws in place do not in any way hinder innovation; instead they foster competition that benefits consumers.
Tesla has been seeking an exemption from the franchise laws that require new motor vehicles sold in Texas be sold through a franchised dealer. Yet franchise laws exist to prevent monopolies and promote competition in vehicle pricing and service to the consumer, provide for the efficient distribution of vehicles and provide a local presence where Texas consumers can have service, warranty and recall work performed even in cases when a manufacturer ceases to do business.
Nothing in state law currently prevents the delivery of new Tesla vehicles from California to the citizens of the state of Texas who wish to purchase them online. Nothing in state law prevents Tesla from using the exact same model it is using today, with gallery stores and service facilities at other locations, so long as any retail presence is operated through a franchised dealer of Tesla's choosing.
As business owners, we can tell you firsthand that franchised motor vehicle dealers in Texas are more than eager to help Tesla succeed. In fact, numerous Texas dealers have contacted Tesla seeking an opportunity to retail their vehicles subject to Tesla's desires. Not only will the franchised dealer absorb any capital outlays required for the Tesla model, but we also believe the franchised dealer can help Tesla sell many more vehicles over the long term. Increased sales volume without the cost burden is a winning business model, which is why every other major auto manufacturer who sells in Texas participates in the model (not to mention those who already sell electric vehicles).
So why the request for special treatment just for Tesla?
Considering the value of the consumer-protection based system currently in place and the fact that Tesla currently has the opportunity to sell its cars to Texans, we do not see any compelling rationale to provide special treatment for Tesla. The franchise laws do not in any way hinder innovation. Other manufacturers produce electric vehicles. Other manufacturers produce in smaller volumes. Other manufacturers produce higher cost and more luxurious vehicles. And yet they are all treated the same under state law. We believe Tesla should be treated the same as well.
Since Tesla has not been prevented from selling cars to Texans and has not gotten any traction with their argument to change our consumer-protection laws, they are now trying to pivot the discussion to economic development — a recent political hot button — by dangling a potential large manufacturing plant in front of our state with the promise of potential jobs into the chosen region.
However, we do not believe that economic development efforts to bring any business to Texas should in any way be connected to changing established laws for the singular benefit of any one company. We believe this sets a bad precedent for future economic development efforts by linking them to special interest changes in the law. State laws are designed to protect the greater good, not promote one special interest.
Rick Cavender is president of Cavender Audi, vice president of Cavender Auto Family and board chair of the Texas Automobile Dealers Association; April Ancira is vice president of Ancira Auto Group and board chair of the San Antonio Automobile Dealers Association.
You may read the full opinion piece here: http://www.mysanantonio.com/opinion/commentary/article/Don-t-exempt-Tesl...