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Texas and Arizona both bar Tesla from selling cars direct to customers. Both states want Tesla's gigafactory

We don’t know whether to laugh or just shake our heads at the recent turn of events to come out of Texas. If you recall, the state of Texas has some of the most strict franchise laws in the country and mandates that vehicles must be sold through dealerships. Tesla, on the other hand, was looking for an exemption, as it only sells its electric vehicles directly to customers (it sees dealerships as unnecessary middlemen).
 
Despite considerable protest from Tesla, Texas held its ground by barring customers from purchasing vehicles from Tesla-owned stores.
 
Fast forward to today -- Tesla is looking to build a new gigafactory in the Southwest to supply batteries for up to 500,000 EVs by the year 2020. The gigafactory would cost a whopping $5 billion, span as much as 1,000 acres, and employ upwards of 6,500 people. The economic benefits of such an operation would be a huge boon to any state for years to come.

 
Given that the gigafactory would be powered primarily by solar and wind energy, the Southwestern states of Arizona, Nevada, New Mexico, and Texas were tossed around as possible site locations. And like clockwork, politicians are already lining up to sweet-talk Tesla, including politicians from Texas.
 
Texas Rep. Jason Villalba (R, Dallas) is hoping that Tesla Motors CEO Elon Musk harbors no ill will towards his state. In fact, in a letter to Musk, Villalba explains that he was a vocal proponent of the Tesla-backed House Bill 3351 that would have allowed factory-owned stores in Texas.


Texas Rep. Jason Villalba (R, Dallas) [Image Source: Wikimedia Commons]
 
He explains that Texas is tax friendly, as it has no personal or corporate state income tax, and goes on to add:
 
Texas has the best climate in the country to run and grow business because of its low regulations and limited government interference. Texas is a right-to-work state with a sophisticated, technologically savvy, and plentiful labor pool — ensuring that Tesla will have access to good, well-trained employees to grow your business.
 
The first part of that statement is quite interesting given the current predicament Tesla finds itself in regarding selling vehicles in Texas. Given its history with the state of Texas, Tesla’s VP of business development, Diarmuid O’Connell, isn’t exactly falling for the pitch either.
 
“The issue of where we do business is in some ways inextricably linked to where we sell our cars,” said O’Connell in an interview with Bloomberg this month. “If Texas wants to reconsider its position on Tesla selling directly in Texas, it certainly couldn’t hurt.”
 
But Texas isn’t the only “anti-Tesla” state that wants in on some gigafactory action. Arizona, which also bars the direct sale of Tesla vehicles to residents, is also lobbying for the gigafactory. All nine of the state’s U.S. representatives penned a letter [PDF] to Musk (as did the mayors of Tucson and Mesa) in order to secure the gigafactory.


Tesla CEO Elon Musk and President Barack Obama [Image Source: Wikimedia Commons]
 
Perhaps Elon Musk was just being kind and generous by including Texas and Arizona in the original proposal for the gigafactory. Perhaps Musk is using the gigafactory as leverage in order to have anti-Tesla laws overturned in those states (this could actually happen in Arizona as a bill has just been introduced to allow Tesla to sell cars directy).
 
Or maybe Musk just wanted to see state politicians dance at the mere mention of billions in dollars in economic development. Regardless of his motives, we have the strong suspicion that the gigafactory will end up being built in either Nevada or New Mexico… if only for spite.

Sources: The Texas Tribune, Texas Rep. Jason Villalba, Congressman Paul Gosar [PDF], The Huffington Post



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Best way to affect is to be in the thick of it.
By kamiller422 on 3/20/2014 10:19:31 AM , Rating: 1
What better way to have influence on Texas policy than to be in the state doing business? Best way to win friends and influence people.




By Motoman on 3/20/2014 10:24:08 AM , Rating: 5
Nope. Once they have your plant, your jobs, the tax revenue...they have you and no longer care.

The only time you have influence is *before* you bring such benefits to the state. Once you're there it's much harder to leave after realizing that the state is never going to act rationally. Like when Amazon had to give up and leave Texas.


By MozeeToby on 3/20/2014 11:04:45 AM , Rating: 2
If it weren't for the huge amount of capital involved in building the proposed plant you would have a point. But once it's on the ground Tesla loses all leverage because Texas knows they will never pick up and move to a different state; it's sunk cost and it's unlikely a move would save Tesla the several billion dollars it would cost to rebuild the plant elsewhere.


By MrBlastman on 3/21/2014 12:44:46 PM , Rating: 2
You need to sign up for remedial Government Influence 101. The best way to influence the government in America is to...

1. Put a reasonable amount of your money into a blind trust. This way it can be tracked nor traced back to you.

2. Buy your trustees off with lots of blow and women.

3. Setup a special interest group (sorry, PAC).

4. Funnel money into said group through the blind trust.

5. Donate to political campaigns.

6. Offer special trips, dinners, parties with hookers to politicians you like, funded through the PAC. Make sure you involve them in some sleazy, less tasteful situations and take plenty of pictures. You'll need these later.

7. Come election time, remind them of their past transgressions.

8. After they are re-elected, remind them again. Have a toadie draft up a letter of whatever law/bill/code you'd like enacted and "deliver" it to them when they are in transit to/from work/dinner/family event/church etc.

9. Sit back and watch as your idea is passed into legislation.

10. Profit madly off of the new law that makes your business bulletproof in whatever state you chose. Throw some scraps the way of the politician now and then, reminding them their past but feed them enough they are well fed, fat and happy.

That's how politics are done in America, my friend.


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