For a decade now, Tesla has been fighting state governments for the right to sell its vehicles directly to customers—something which has historically been prohibited in most US states. Texas is one of the states that still forbids direct sales, so residents have had to resort to a workaround some call 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.
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, as John Voelcker reports in The Drive. 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.
Tesla sure would appreciate changing the law, so that this is not required!
— Elon Musk (@elonmusk) May 27, 2021
That’s not the only roadblock that the Lone Star State, which Elon Musk assumed was so business-friendly, may erect. The Texas legislature did find time this session to consider a new tax on EV owners that, at up to $400 per year, would be the highest in the nation. (Texas lawmakers also found time to sweep away gun licensing laws, 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.
Source: The Drive