Tesla is building a factory in Texas to make some of its cars, but once it gets up and running, the cars made there may need to make a roundabout to get to Texas buyers (Going through The reader). Due to state laws prohibiting automakers from selling direct to consumers, Tesla could end up shipping cars from its Austin plant to other states, before they are returned to their Texas buyers. State lawmakers were debating legislation that would have avoided the situation, but now have missed their chance to pass it before they have to take a break until 2023 – the factory should be completed by the end of 2021.
Laws preventing automakers from selling their vehicles directly to consumers are not unique to Texas, nor do they target Tesla: they were originally set up in many states to prevent manufacturers from undermining their franchise dealers and bankrupting them. Tesla doesn’t have any franchise dealers to protect, but that doesn’t matter to Texas law as it’s currently written.
It’s an embarrassing situation for the state, where a worker at the new factory (where Tesla plans to invest a billion dollars) would have to wait for a car he made to drive to a dealership in another state. for processing, then returns to it. . It might even be the case for Elon Musk himself, who said he moved to the state earlier this year. It’s also a little embarrassing for Tesla, who decided to build a factory in the state without making a deal to sell their cars there.
There was an invoice proposed by the Texas legislature apparently designed to help Tesla: it would have allowed companies to sell their cars directly to consumers if they were fully electric or battery powered, and only if these companies never had franchises in the state. This could rule out companies like Ford, even though it sells electric vehicles, but could also allow other electric vehicle manufacturers like Rivian, Lucid and Canoo to sell directly once they start producing vehicles.
Tesla and other electric vehicle makers have been battling in many states for permission to sell direct for years, and have even had some recent success: Tesla was cleared for sale in Colorado (where Rivian also recently had access) and Tesla managed to find a legal loophole in Michigan. Up to 12 states allow Tesla to sell directly to customers, and others let Tesla open a limited number of concessions.
But there are many states where hopeful buyers still have to go through steps, such as having to send documents across state borders to obtain temporary labels, or travel to other states to make the purchase: Oklahoma, Nebraska, Wisconsin, West Virginia, Alabama, South Carolina, New Mexico, and of course Texas have all offered direct sales, but the bills have all been closed, filed indefinitely, or ignored for years. You’re here even has a page on their website where he asks clients to engage with their elected officials on these cases.
Connecticut, another state where direct selling is not allowed (although Tesla can rent cars there to its customers), currently has legislation in preparation to allow direct sales, and Tesla and Rivian are working together to try to pass the legislation in other states this year as well as. In many states, Tesla has found a way to get cars to customers, but not without hassle.
For Texas, however, the wait for legislation could be long. Elon musk tweeted in response at The readerof the article on time-strapped lawmakers pushing for change in the state. It is not impossible that this will happen, even with the legislature on hiatus until 2023: Gov. Greg Abbott (who called Tesla “one of the most exciting and innovative companies in the world” when he announced his plant in Texas) could convene a special session to focus on the law not passed. Abbott did not respond to a request for comment on whether he intended to do so.
Tesla would certainly appreciate changing the law, so it doesn’t have to be!
– Elon Musk (@elonmusk) May 27, 2021
It is also possible that a legal loophole is created, as in Michigan. However, it doesn’t appear that Texas lawmakers are in a hurry to go this route: Tesla has also attempted to secure the right to sell cars directly to Texans. in 2013 and 2015, and lost both times.