Tesla Loses Challenge to Texas Dealer Franchise Law

Tesla Automotive Inc. has failed to convince Texas state legislators to pass bills that would have given the California-based electric vehicle maker an exemption from a Texas dealer franchise law.

Tesla sells its Model S sedan through company-owned outlets a practice barred by the state law. At Tesla stores in Austin and Houston, employees can show the car and tell consumers how it works. But they may not disclose its price, offer a test drive or make a sale.

The Texas Automobile Dealers Assn. lobbied against the proposed exemption.

The state legislature ended its regular session last week without acting on the bill Tesla backed. Lawmakers aren't scheduled to convene again until January 2015.

In April West Virginia rejected the company's application for a dealer license. Tesla is fighting a proposed North Carolina law that would block it from selling cars there, even via the Internet.

But the company has gained the right to sell its vehicles in three other states by winning a legislative fight in Minnesota and court battles in Massachusetts and New York.