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Gov. Rick Perry  (Source: Bloomberg)
He said the pros of allowing this would outweigh the cons

Not long ago, Texas told Tesla Motors to take a hike when the automaker wanted to sell its electric vehicles (EV) directly to customers without the use of auto dealers. But it seems that the Lone Star state is changing its tune now that Tesla's giant Gigafactory is on the line. 
 
According to Dallas News, Gov. Rick Perry (R-TX) indicated that Texas needs to take a second look at its state rules -- which he referred to as "antiquated" -- that prevent Tesla from selling its EVs directly to customers. 
 
"Tesla’s a big project,” said Perry. “The cachet of being able to say we put that manufacturing facility in your state is hard to pass up.
 
“I think it’s time for Texans to have an open conversation about this, the pros and the cons. I’m gonna think the pros of allowing this to happen outweigh the cons.”
 
Perry wants Tesla's Gigafactory, which the automaker plans to build in a Southwest state in the U.S. The factory aims to supply batteries for up to 500,000 EVs by the year 2020. The gigafactory would cost $5 billion USD, span as much as 1,000 acres, and employ about 6,500 people. It would also largely be powered by renewable energy. 
 
Four states -- Texas, Arizona, New Mexico and Nevada -- are pushing to become the site for the Gigafactory. Whichever state Tesla chooses will see great economic benefits from the large-scale plant; hence Texas' new view on direct sales.
 
The state realizes that Tesla likely won't choose it if Texas doesn’t allow the automaker to sell its vehicles without the help of auto dealers. 
 
It's possible that Tesla CEO Elon Musk is using the Gigafactory as leverage to get the direct sales laws changed in certain U.S. states, and it looks to be working as Arizona recently passed a bill to allow Tesla to do just that.
 
 
Texas Rep. Jason Villalba (R, Dallas) recently wrote Musk a letter in an attempt to patch things up with the automaker. He said he's a proponent of the Tesla-backed House Bill 3351, and that Texas is the perfect state for the Gigafactory due to its warm climate (for the solar-ran factory) and large labor pool to fill factory positions.  
 
Earlier this month, New Jersey Gov. Chris Christie’s administration proposed a new rule that requires a person to have a franchise agreement with an auto manufacturer in order to be granted a license to sell. Tesla already had two stores in the state at the time. 
 
Shortly after, the New Jersey Motor Vehicle Commission voted in favor of the ban of direct auto sales. This means that the two stores must be turned into showrooms and nothing more after April 1, 2014. 
 
New Jersey is now the third state to ban Tesla's direct sales model. 

Source: Dallas News



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By Etsp on 3/24/2014 7:26:55 PM , Rating: 4
Typical politics... if something might hurt their party in polls or contributions, go against it, until it would help their party, then they're all for it.

Rick Perry was for the dealership model, before he was against the dealership model.




By HostileEffect on 3/24/2014 7:49:06 PM , Rating: 2
This is how people tick, not just politicians. Even friends serve their own ends and you are nothing more than a stepping stone for them to reach their objective. Even today, one of my acting seniors disrespected me, why? My face looks weird, yes, thank you for reminding me that even in a "professional job" I will always catch crap for having different features. I'm leaving, so I'm a worthless traitor and a dirt-bag, I'm useless to his goals now.

Stroke someones ego and make the world revolve around them and you can make them do anything for you.

Its the way of the world, the sooner you learn it, the sooner you can manipulate it.


By therealnickdanger on 3/25/2014 8:07:58 AM , Rating: 3
I like how everyone complains when a politician behaves one way, but then when he changes his mind, it is also unwelcome. Damned if you do, damned if you don't. Has no one here ever changed his mind before? I don't know about the rest of you, but I happen to think that being able to change your views is a sign of growth and character. All we hear about in the press is how people are constantly unchanging and always saying "no" to something.

In his defense (and in defense of every politician), no one man can be an expert on everything. I know those of us who type out comments on DT are the exception to this rule, but let's try to keep that in perspective.

Every politician usually has a small handful of things he is passionate about, but then relies on others to fill in everything else. This is also true in large corporations. You can only have so many advisors to work so many angles, so you're bound to not understand everything at play. Then if you make the wrong decision, you WILL hear from constituents. Then you spend some time to educate yourself on that topic, and make a new call.

I once considered running for city council, but then I went to a city council meeting. Yeah, f*** that noise.


By Dr of crap on 3/25/2014 12:27:30 PM , Rating: 3
And so you have pulled something over your eyes
and can't see how stupid his is now that there is money and jobs at stake that he is NOW changing his mind?

Money talks - and especially for politicians,
maybe you can't see that either?


By retrospooty on 3/25/2014 12:36:27 PM , Rating: 2
Not that I like Rick Perry or anything he stands for, but in this case, I don't think he is wrong. It's OK to look at a new deal or new situation and change your mind on an issue. Like many states in the past, Texas legislators voted for the dealer model laws referenced above. Now, a company that has a new direct to customer model,(no dealer) may build a plant in the state if that law goes away. I would work to kill that law too if it meant jobs and money for my state. How is that bad? OF all the asinine things this clown has said and done, this inst one of them.


By niva on 3/25/2014 6:33:08 PM , Rating: 2
I live in Texas and Rick Perry is an embarrassment to this state. The guy has an iq of a door handle, and I'm insulting quite a few door handles when I say that. I have yet to hear an actual "con" for letting Tesla sell direct from the consumer standpoint.

Tesla should forget about building a factory here, build in a state that guarantees them direct sales and fk Rick Perry.


By jimbojimbo on 3/26/2014 11:44:59 AM , Rating: 2
The problem is they decided they don't want Tesla selling cars directly while the plans for the factory were already presented. Now, if they voted to ban them but Tesla said hey we could maybe build a factory there then they repealed it I could understand that. With the new information they would decide one was better than the other. Since the future factory options were already proposed but then they decided to vote to ban direct auto sales Texas basically told Tesla that banning direct sales is more important than the factory. A few days later after a lot of backlash they thought, oh geesh, maybe that factory is more important.
This just means they are being completely wishy washy and I wouldn't trust them for a second.
With the initial vote they displayed their intent so unless the agreement with building the factory is that the state will never ban direct auto sales I would say screw them.


By retrospooty on 3/26/2014 8:07:58 AM , Rating: 2
I know, why is this so tough for people to get? Whether you like Perry or not, him trying to get this changed and win a factory that means money and jobs for his state. That is what a governor is supposed to do, work toward improving the state and its finances for the betterment of its citizens. In this case, how can anyone possibly disagree with him changing his mind?


By Mint on 3/26/2014 1:04:47 PM , Rating: 2
Precisely. This is exactly what people want from politicians: when the public overwhelmingly wants something, and it supports a politician's campaign principles, then get it done. Flip-flopping is better than blind intransigence.

This is why Musk decided to start this fight. He knew how the public felt about car dealers, and knew how easy it is to sell his position as pro-business.

Some demands from campaign donors aren't worth supporting. Within a couple years, I doubt any politician will want to be seen in the pockets of the dealer associations.


By flyingpants1 on 3/26/2014 2:32:31 PM , Rating: 2
Pretty genius how he highlighted 4 states as canditates for the gigafactory, just to manipulate 'em into reconsidering their laws.


By clarkn0va on 3/25/2014 3:02:35 PM , Rating: 3
quote:
I like how everyone complains when a politician behaves one way, but then when he changes his mind, it is also unwelcome


Nobody changed their behaviour or their mind. In this case, the majority of politicians in Texas chose to cater to the money from the dealers' lobbyists and actively shut Tesla out. When Tesla came back with a proposition they couldn't ignore, the politicians quickly turned away from the old dealer money toward the newer and much bigger promise of factory money.

They banned Tesla because they wanted money, and now they want to welcome Tesla, because they want the money. Had they actually done what politicians are supposed to do, which is guard the best interest of their constituents, then they would have either allowed Tesla in the first place, or demonstrated why this would have been detrimental to the taxpayer.

Looking wishy-washy in front of the whole world is not a noble demonstration of how people change, but rather an embarrassing demonstration of how greed knows no loyalty. Musk and Tesla should be very wary of doing business with such a capricious lot.


By Etsp on 3/25/2014 3:15:16 PM , Rating: 2
quote:
I like how everyone complains when a politician behaves one way, but then when he changes his mind, it is also unwelcome.
I agree with you. That's not my issue here.

I don't care that Rick Perry changed his mind on something. I care that he changed his mind NOT because the dealership model is anti-competitive and outdated, but only because it would have likely cost Texas its shot at having this plant built in their state.

He didn't try to do the right thing and fix antiquated laws until it was going to cost the state something very tangible and visible.

When John Kerry was put over the coals for changing his stance on the war in Iraq, that ticked me off. I just used that as an example to show that I'm not being partisan about this, as politicians on both sides of the isle do it.


By Reclaimer77 on 3/25/2014 9:01:00 PM , Rating: 1
quote:
He didn't try to do the right thing and fix antiquated laws until it was going to cost the state something very tangible and visible.


That was the status quo long before he took office.

Trying to change the status quo can be VERY risky for a politician. Look at when Bush tried to reform Social Security.

We've known Social Security is an absolute trainwreck, heading for disaster, for years now. But politicians keep passing the buck, because trying to actually FIX it is too risky. The other side will just claim you're trying to "kill the elderly", and they'll vote you out of office.

This issue never even came up until Tesla challenged it. You're acting like the guy is supposed to right all the wrongs in the world. Wow, I'm SHOCKED a politician waited for a popular issue before deciding on it first!!! Because, you know, our President would NEVER do that *cough*

If Tesla gets to sell their vehicles in Texas at the "cost" of a battery factory in an extremely competitive corporate tax structure..ummm, I fail to see what you guys are getting so upset about.

quote:
When John Kerry was put over the coals for changing his stance on the war in Iraq, that ticked me off. I just used that as an example to show that I'm not being partisan about this, as politicians on both sides of the isle do it.


First off, that was WAY worst. WTf dude?? Nobody is dying over this Tesla issue. Kerry knew he was lying, it was 100% a political move, while soldiers were dying in Iraq he was more interested in Bush-bashing.

If that's your idea of not being partisan...whoa.


By kamiller422 on 3/25/2014 12:00:45 AM , Rating: 1
I don't think the GOP is hurting in the polls in Texas. Rick Perry is damned either way. If he supports the ban, it's because he's in the back pocket of dealership interests. If he supports lifting the ban, it's because he wants Tesla's factory.

Maybe reality is Tesla was no on the forefront of his agenda or interest. With a major project on the line, it gets his eye.

Lastly, he's not running for governor. And if he runs for president, I don't think not having Tesla in Texas is going to break his campaign fund.


By BRB29 on 3/25/2014 7:39:02 AM , Rating: 1
Basically, money talks.

We all know that the dealership model will disappear in the future. Dealers can only put up a fight as long as people still use them. We only need a few states to legalize direct sales. People in surrounding states will flock to that state to buy vehicles because it is cheaper. That state will take all the sales tax forcing the pro-dealership states to legalize direct sales or they will continue to lose tax money.

So dealers are on borrowed time right now. They will crumble eventually and they can only continue to exist when all dealers in all states keep bribing hard.


By tng on 3/25/2014 8:13:42 AM , Rating: 2
quote:
That state will take all the sales tax forcing the pro-dealership states to legalize direct sales or they will continue to lose tax money.
Nonsense, most states already have laws to prevent this already.

I know that most states have laws that if you buy a car out of state and then try to register it, you have to pay sales tax or penalties or you can't register it in that state. What this amounts to is that you pay sales tax two times.


By Denigrate on 3/25/2014 11:11:31 AM , Rating: 2
Not true, at least not in all states. Typically, if you buy out of state, and show that you paid sales tax on the transaction, you will not have to pay sales tax to your home state.


By BRB29 on 3/25/2014 12:05:23 PM , Rating: 2
quote:
Typically, if you buy out of state, and show that you paid sales tax on the transaction, you will not have to pay sales tax to your home state.

correct, i bought my car in NC and did not have to pay sales tax in VA or the first year's registration tax.


By JohnThacker on 3/25/2014 12:14:19 PM , Rating: 2
Depends on whether the rate is higher or lower, typically. If you buy from a state with a lower tax, often your state will make you pay the difference.

VA and NC have the same sales tax on cars (lower than the general sales tax), so nothing happens. But VA and NC are lower than MD, so if you buy in VA or NC and then register in MD, you have to pay the difference.


By paulcube on 3/25/2014 10:15:30 PM , Rating: 2
They already know who the cheapest state is but since it is close, they want a bidding war.

Have some Federal support behind them (big contracts always political) but I think Arizona or NM has the contract if I were to guess.


By Moishe on 3/28/2014 1:44:19 PM , Rating: 2
Agreed, but it's human nature.

Would you have him blindly stick to his "ideals" (covering for his dealership lobbyists, like in NJ) and turn down tax revenue and jobs?

This is the beauty of a system where states compete. New Jersey wants to play hardball and thus they will push away more and more taxes and jobs. NJ is already so hosed that people are bailing. Should Texas take the same approach?

Hell no. The whole idea that anyone has to jump through a series of artificial rings of fire designed purely to take money from and control other businesses is crooked. It's bad enough that we have these corrupt politicians lining their pockets with OUR money. We don't need them to bring their cronies in on it.

I am happy that Musk and other states are challenging the status quo.

Funny how "think for yourself" is a mantra of many leftists, but they don't want their own people to start thinking for themselves and potentially take a serious look at the competition.

I don't give a crap which side people are on. Anytime politics is used to hinder the free market for no good reason, it's bad.


I find it hypocritical
By FITCamaro on 3/25/14, Rating: 0
RE: I find it hypocritical
By maugrimtr on 3/25/2014 9:39:57 AM , Rating: 2
quote:
That this California based company isn't even considering it's home state for where to put this factory. I mean to anyone with common sense, it's blatantly obvious why. Because Commifornia is the most anti-business state out there.


Telsa already have a factory in Fremont, California. Apparently, it's not as commie as you thought.


RE: I find it hypocritical
By retrospooty on 3/25/2014 10:43:38 AM , Rating: 2
California is never as commie as he thinks. I am positive he has Haight Ashbury in the late 60's early 70's as his permanent impression of the state. Forget the millions and millions of republicans, and the tech capital of the world (Silicon valley), its just a bunch of commies and fags right?


RE: I find it hypocritical
By Jeffk464 on 3/25/2014 5:46:56 PM , Rating: 2
California is huge and has very different politics based on the area you are talking about. Why do you think proposals to split up the state keep coming around?


RE: I find it hypocritical
By Reclaimer77 on 3/25/14, Rating: 0
RE: I find it hypocritical
By Dr. Kenneth Noisewater on 3/25/2014 10:44:32 AM , Rating: 2
They got a sweet deal for that plant, and sweet deals and free tax gimmes are the only way California can actually get businesses these days.

That said, Texas won't happen without highly extraordinary effort from Perry, such as calling a special legislative session for the express purpose of passing laws that allow for Tesla sales.

That's not happening, so IMO the plant will end up in Nevada.


RE: I find it hypocritical
By lithium451 on 3/25/2014 9:24:03 PM , Rating: 2
Pay attention doc - that's the only way most states attract new business these days, especially all those "right-to-work" southern states.

It a great way to continue the massive wealth transfer to the 1% of the 1%.


RE: I find it hypocritical
By retrospooty on 3/25/2014 10:18:55 AM , Rating: 2
California has an extremely high wage level, so building something like a factory to make batteries with mostly low end manufacturing jobs isn't cost effective.


RE: I find it hypocritical
By Jeffk464 on 3/25/2014 5:49:58 PM , Rating: 2
Not really, CA has a very high cost of living and public unions have gotten themselves insanely good pay packages, but low end jobs don't pay any better than anywhere else. Basically if you don't have a high power job its time to move out of the state.


RE: I find it hypocritical
By retrospooty on 3/26/2014 8:03:05 AM , Rating: 2
" CA has a very high cost of living "

That is what I am saying. high cost of living, high rent/property value + high wages balances out somewhat for people that live there, but for a business it doesn't.


RE: I find it hypocritical
By Mint on 3/26/2014 1:49:25 PM , Rating: 2
This is going to be a very modern factory. Direct wages for production workers aren't going to be a significant factor, because it'll be heavily automated. 6500 jobs is not a lot for a $5B factory. Even if locating in the boonies of CA means a $5/hr premium over Texas (unlikely), that's only $65M/yr, or $1-2 per kWh.

The big economic effects are going to be from building all the equipment that Tesla will buy, and that'll probably come from many places.

The main reason not to locate in CA is probably land cost. It's also a waste of publicity, as Tesla would love Texans to feel local pride for their cars. Tesla sold 1/3rd of their 2013 production in CA, and Texas is the second largest state.


Arizona's law was not because of Tesla
By Adul on 3/24/2014 7:46:56 PM , Rating: 2
The law in Arizona against direct sales has been on the books since 2000. There was no booting of Tesla. I am hopping to see the law repealed though, would be nice to test drive one. ;)




RE: Arizona's law was not because of Tesla
By m51 on 3/24/2014 11:20:05 PM , Rating: 2
You'll love it, it's an absolute blast to drive. Awesome car. A friend who is an inveterate performance car nut got one a year ago and has declared it his dream car. He drives it hard and just loves the thing. After driving it a few times myself I'm also very impressed. I'd get one if it was a tad less expensive.


By wordsworm on 3/25/2014 2:03:37 AM , Rating: 2
It is the most exciting car company I've ever seen. I will be thrilled when this thing gets partnered up with Google for a fully autonomous electric car for less than 30k...


RE: Arizona's law was not because of Tesla
By Reclaimer77 on 3/25/2014 9:12:44 PM , Rating: 2
quote:
You'll love it, it's an absolute blast to drive.


Pretty much anything for that price is. Just saying.


RE: Arizona's law was not because of Tesla
By Mint on 3/26/2014 2:50:28 PM , Rating: 2
No car that is similarly roomy or pricey has the throttle response and near-zero body roll of the Model S.

Just try to find sub-$100k competitors that do 45-65 mph in 1.7s. MotorTrend puts every car it can through that test.

Cars with AWD and/or launch control can best it from standstill, and a Panamera is the handling benchmark on twisty roads (under $100k it isn't as quick), but otherwise the Model S is unparalleled off the track.


RE: Arizona's law was not because of Tesla
By JohnThacker on 3/25/2014 12:20:29 PM , Rating: 2
Yes, that's true of most states. Most states have various "dealer franchise protection laws," that are supposed to help dealers (who tend to be local businessmen) from being abused by out of state car makers. Of course it ends up being protectionism. But many of those regulatory laws don't really envision a direct sales model, simply assuming that everything will be with franchise dealers, and that they need to regulate the relationship.

(NB: The Petroleum Marketing Practices Act is a similar federal law that prevents gas companies from closing gas stations or failing to renew franchise agreements in most cases.)

In most states, Tesla's franchising model was arguable illegal, though like many new economy experiments, whether ridesharing like Uber, Lyft, and Sidecar, or things like Aereo, Tesla could also argue that it was legal, especially depending on the exact wording of states. In some states there have been lawsuits, in other states rulings by appointed regulatory bodies. Generally the incumbent car dealers have a good relationship with their regulatory bodies (aka regulatory capture.) So in many states, but not all, they've gotten existing law interpreted as they desired.

In other states there have been efforts to clarify existing law, generally with NADA (North American Dealers Association) pushing anti-direct sales.

Other manufacturers, not just Tesla, have been interested in direct sales before, and NADA has always been against it. What makes Tesla different is that they have no dealers at all.


By 1prophet on 3/26/2014 8:44:54 AM , Rating: 2
quote:
Other manufacturers, not just Tesla, have been interested in direct sales before, and NADA has always been against it. What makes Tesla different is that they have no dealers at all.


Others have tried, all have failed, the last thing the big manufacturers want is owning dealerships with all the liabilities and expenses that go along with them,

the present model insulates them from most of that while allowing them to have almost total control.


By Jeffk464 on 3/25/2014 5:42:48 PM , Rating: 2
If you really want one and can afford it, just go buy it in another state.


lol
By Fidget on 3/26/2014 9:10:50 AM , Rating: 2
“I think it’s time for Texans to have an open conversation about this, the pros and the cons. I’m gonna think the pros of allowing this to happen outweigh the cons.”

I like how he infers that somehow "Texans" might object to direct sales. The reality is I doubt you could find a single Texan who doesn't work for a dealership who would give two rats asses if manufacturers were allowed to sell direct.




RE: lol
By Morlarl on 4/15/2014 7:41:38 PM , Rating: 2
One question i have. If Elon Musk said tomorrow i've decided to build in New Mexico,would Perry still try to change "Antiquated laws"?


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