At the mall, Tesla staffers can meet, greet, tell -- but not sell
Reprints
Print
Respond
In Texas, manufacturers are prohibited from selling directly to consumers. So what is Tesla doing with a retail store in the Galleria shopping mall in Houston?
Tesla retail chief George Blankenship says the Texas store will display vehicles and direct interested consumers to the company's Web site to configure a vehicle and complete the sale. On-site employees will do everything but sell the car, he said.
But Tesla can't legally ship cars sold on the Internet to buyers in Texas. Adam Shaivitz, a spokesman for the Texas Department of Motor Vehicles, says buyers must make their own arrangements to ship purchased vehicles from Tesla dealerships outside the state. Tesla and its dealerships are prohibited from arranging or carrying out the shipment.
And what about warranty repairs? Tesla says it will open service centers in Houston, Dallas and Austin soon. But a Tesla owner must contact the selling dealership in that other state, which then would have to subcontract the warranty job to a repair shop in Texas, Shaivitz said. They would be allowed to select the Tesla service centers to do the work.
Karen Phillips, general counsel for the Texas Automobile Dealers Association, questions that interpretation and sent a letter last week to the DMV seeking clarification.
The Texas statute allows only a franchised dealer within the state to perform warranty repair, she said.
The cumbersome process won't be good for Tesla consumers, Phillips said. "We've had other manufacturers make this effort to try to sell directly to the public, and it doesn't work," she said. "What needs to be done actually is for Tesla to use the franchise system."
Mark Rechtin contributed to this report
You can reach Amy Wilson at awilson@crain.com.
