Texas restrictions on Tesla sales could keep out company’s lithium-ion ‘gigafactory’

By Travis Gettys
Tuesday, March 18, 2014 13:55 EDT
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[Image via Isaac Z. Ortiz, Creative Commons licensed]
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Sales restrictions placed on Tesla Motors by Texas could put the brakes on the state’s hopes of landing the company’s planned $5 billion lithium-ion battery plant.

The automaker cannot sell its electric cars directly to consumers in Texas due to state laws – among the nation’s strictest – that protect and regulate auto dealerships.

Tesla CEO Elon Musk has already said that franchise restrictions would keep his company from building a possible truck manufacturing plant in Texas and Ohio, which has enacted similar laws.

Tesla has said it would locate its wind- and solar-powered “gigafactory” that could employ about 6,500 people in Texas, Arizona, Nevada, or New Mexico.

Texas lawmakers have sent a letter to Musk touting the state’s business-friendly reputation, but Tesla officials have suggested the state’s restrictions on its sales made it less attractive as a location for the plant, reported The Texas Tribune.

The state prohibits automakers from selling vehicles directly to customers in Texas and instead requires them to sell through regulated franchise dealers.

Other states have enacted similar laws, including Arizona – which has laws nearly as strict as Texas.

Texas consumers may purchase Tesla cars through the company’s website.

Auto dealers say the rule protects consumers and ensures the livelihood of Texas dealerships, but Tesla officials said the laws are outdated and inefficient.

The electric car maker showcases vehicles at two “galleries” in Austin and Houston, but employees are prohibited from discussing prices or other aspects of buying the vehicles, which must be delivered to buyers in an unmarked truck and then be unwrapped by the buyers.

Nonetheless, more than 1,000 Texans have purchased Tesla vehicles through this process.

[Image via Isaac Z. Ortiz, Creative Commons licensed]

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