Tesla is building a factory in Texas, but once it is operational, cars built there may have to detour buyers in Texas.
As the State laws prohibit car businesses that sell directly to consumers, Tesla may first ship the car from the Austin factory to other states and then return it to buyers in Texas.
State legislators discussed laws that could prevent this from happening, but they have missed the opportunity because of the break till 2023, and the construction of the plant should be completed before the end of 2021.
Laws prohibiting automakers from selling cars directly to consumers apply not only to Texas but also not to Tesla: they were originally enacted in many states to prevent manufacturers from sabotaging their franchisees and collapse.
Tesla does not have any franchised dealers, but Texas laws were already written.
For the new factory (Tesla plans to invest $1 billion), workers have to wait for the produced cars to be driven to a dealership in another state for processing, which is an unfortunate situation for that state.
That may be the case with Elon Musk himself, who said he moved to the state earlier this year.
It also made Tesla a little humiliated, as they decided to build a factory in the state without first making a deal with the state.
Texas lawmakers introduced a bill that was clearly designed to help Tesla:
It allows companies to sell their cars directly to consumers when they are fully Electricity or batteries-powered, provided that these companies have never owned a franchise in the state.
That may exclude companies such as Ford from selling electric cars,but it may also allow other electric car manufacturers such as Rivian, Lucid, and Canoo to sell directly after they start producing cars.
Tesla and other electric car manufacturers have been fighting for direct sales permits in many states for many years and even achieved some recent success: Tesla was allowed to sell in Colorado.
In Michigan, Tesla also managed to find a way out. Tesla was able to sell in 12 states Tesla directly. In other states, Tesla is allowed to open a limited number of dealerships.
But in many states, promising buyers still face obstacles, such as: Send documents across states to obtain temporary labels or go shopping in other states.
Oklahoma, Nebraska, Wisconsin, West Virginia States, Alabama, South Carolina, New Mexico, and of course Texas all offer direct sales, but all accounts are closed, delayed indefinitely, or ignored for many years.
Tesla even has a page on its website asking customers to contact their elected officials about these problems.
In the state of Connecticut, direct sales are prohibited (although Tesla can rent cars there)
,but the law is being drafted to allow direct sales, and Tesla and Rivian are working together to get the laws passed in other states this year.
In the United States, Tesla found a way to bring cars to customers, but it was not without problems.
However, for Texas, the waiting time for the law can be very long. Elon Musk posted a tweet saying:
“Tesla sure would appreciate changing the law, so that this is not required!”
Governor Greg Abbott (when Tesla announced the plant in Texas, calling Tesla “one of the most exciting and innovative companies in the world”) could call one Special meeting to revise the law.
Still, Abbott did not say anything in this regard.
It is also possible to create a loophole like in Michigan, but Texas lawmakers did not seem to take this path.
Tesla also tried to obtain the right to sell cars directly to Texas in 2013 and 2015 but failed both times.
As the State laws prohibit car businesses that sell directly to consumers, Tesla may first ship the car from the Austin factory to other states and then return it to buyers in Texas. Laws prohibiting automakers from selling cars directly to consumers apply not only to Texas but also not to Tesla: they were originally enacted in many states to prevent manufacturers from sabotaging their franchisees and collapse. In the United States, Tesla found a way to bring cars to customers, but it was not without problems.