Will Tesla really have to ship vehicles out of Texas and back again to sell to state residents?
Tesla has been waging a war against various state governments for the right to sell its vehicles directly to customers for a decade now. Texas is one of the states that still forbids direct sales, so residents have had to resort to a workaround known as the “Texas two-step.” Texans can order a Tesla through the company’s web site, but no orders may be placed or processed within the state. The buyer must pay for the vehicle online, and can then pick it up at one of Tesla’s eight Texas service centers.
Above: Tesla's Model Y (Photo by: Craventure Media)
Now that Tesla is building a massive Gigafactory in the state, a billion-dollar project that’s expected to create at least 5,000 jobs, will the state government reverse its direct-sales ban (as Nevada did when Tesla chose it for the site of Gigafactory 2)?
Not this year. Texas’s state legislature meets only every other annum, and this year it will end its session without changing its auto dealer franchise laws. This apparently means that, once Tesla begins production at the Austin Gigafactory, any vehicles sold to Texans will have to be shipped out of the state, then shipped back in.
Above: Tesla's battle over direct sales in Texas has been going on for years, and continues to this day (YouTube: ReasonTV)
That’s not the only legal roadblock that Tesla may face in the Lone Star State, which Elon Musk assumed was so business-friendly. The Texas legislature did find time this session to consider a new tax on EV owners that, at up to $400 per year, would have been the highest in the nation (this bill seems to have died, for now). Of course, Texas lawmakers also found time to sweep away gun licensing laws, attempt to restrict voting rights, and specify which bathrooms schoolchildren will be permitted to use.
In March, State Representative Cody Harris [R-District 8] introduced a bill that would have crafted a narrow exception to the dealer franchise law, allowing Tesla to deliver EVs in the state. However, the bill died in the House Transportation Committee, so the direct-sale ban will remain in place. Unless something unexpected happens, the next chance to change the law will be two years from now, when the legislature meets again.