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Tesla bills in reverse at the Texas Legislature
AUSTIN — A crusade waged by Tesla Motors CEO Elon Musk to change Texas law and allow his company to sell electric cars directly to customers is on life support at the Legislature — and its chances this legislative session are fading quickly.
After getting crushed by state auto dealers at the Capitol two years ago, Musk all but declared war in the name of Tesla, assembling a deep bench of powerful lobbyists and spreading out a total of $150,000 in political contributions to dozens of lawmakers in recent months.
However, bills backed by Musk and his money-losing electric-auto firm have not just stalled in the Senate and House — where unfriendly committees have suffocated the proposals — but appear to be heading in reverse as key legislative deadlines approach.
The latest blow: the senator authoring a bill to allow Tesla to sell directly in up to 12 locations across Texas said this week that he’s abandoned plans to push the measure forward.
“We’re not looking at pursuing the bill at this time,” state Sen. Kelly Hancock, R-North Richland Hills, told the San Antonio Express-News.
State law requires new cars to be sold through a dealer, and Tesla, opting to push product directly to consumers from its own stores, is trying to get lawmakers to bite on a plan to allow it to cut out traditional auto dealers. For now, the only way for a resident of Texas to get a Tesla is online or in another state.
Aware of the uphill climb, the company mounted a public relations campaign that honed in on Texas’s free-market values, received the backing of academics who urged lawmakers to alter the franchise model and recruited a seasoned team of Austin power players.
The efforts have been fiercely opposed by a network of well-entrenched state auto dealers, along with auto manufacturers like General Motors, who’ve deployed their own army of lobbyists and make up some of the biggest donors to GOP heavyweights like Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus.
Hancock, the senator carrying the Tesla proposal, did not elaborate on why he was burying his proposal. But his sudden cold shoulder reflects the less than enthusiastic public response the bill received in the Senate, where it sits with no champion, no joint authors and no co-sponsors. Tesla never received a hearing, and won’t unless the House moves its version of the bill over, said Sen. Troy Fraser, who chairs the committee considering the legislation.
“Even the members in favor, which were not very many, do not want to have a hearing,” said Fraser, R-Horseshoe Bay, who polled the committee two weeks ago on whether to hold a Tesla hearing.
In the House, Tesla’s bill is actively being worked by an Austin Democrat, but also has been met with resistance. A panel of lawmakers gave the measure a lukewarm reception at a hearing last month in which a Tesla official said the company may have to resort to taking Texas to court to get what it wants.
The House Licensing and Administrative Procedures Committee left the bill pending, and the panel’s No. 2 says he doesn’t think it has enough support to move forward.
“It’s fair to say that Tesla is dead in committee for this session,” said state Rep. Roland Guitterez, a San Antonio Democrat who serves as the committee’s vice chair and opposes the bill. “If there was a willingness to move Tesla, I think we would have taken the vote already.”
The chairman of the committee, state Rep. Wayne Smith, R-Baytown, also threw cold water on the Tesla bill, saying automobile dealers in his district support the community.
“That process seems to work so far,” Smith said of the current franchise dealer model, noting he’d bring the bill up for a vote only if there’s support for it.
State Rep. Eddie Rodriguez, the House author of the Tesla bill, says he’s at least two votes shy of being able to get the bill out of committee and on to the House floor. Aware of a looming May 14 deadline to pass House bills out of the lower chamber, Rodriguez hasn’t conceded but says he is clearly “running short on time.”
“I don’t want to say that it’s dead yet,” said Rodriguez, whose bill would also allow Tesla to sell its cars directly at 12 stores in Texas.
Tesla did not return multiple requests for comment.
With less than four weeks until the legislative session ends, it’s too early to declare game over for some high-profile bills backed by powerful special interests. Lawmakers and lobbyists have ways of resurrecting bills, and team Tesla has indicated it’s not planning on laying down in the home stretch.
Tesla’s options, however, are extremely limited: muster the votes in committee in less than two weeks, possibly via a compromise; or tag some sort of language on as an amendment to another bill that hits the House floor, a move that could backfire in front of the entire chamber.
Opponents already are watching.
“They’re going to have a tough time trying to do that,” John Montford, a former state senator-turned lobbyist, who is working for General Motors, said of the potential for the Tesla bill to come back as an amendment.
Most states have some variation of a franchise system for auto dealers, but Texas is one of five with a ban on direct auto sales.
Tesla has cast the Texas law as archaic, with Musk even labeling it “unTexan.” Auto dealers fire back that creating a carve-out for Tesla to do direct sales would give other manufacturers leeway to ask for the same treatment.
A different version of the Tesla bill won approval last session from a pnael that was much friendlier to the company, the Housee Committee on Business and Industry. But this session the bill was routed away from that committee and to House licensing panel, which Rodriguez said “has a lot to do with” why it hasn’t made much progress.
“Of course, I’m disappointed. Because of the momentum that I felt we had from last session, I thought we’d be a little further along this time” he said. “I’ll definitely look at this issue again in the future.