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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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They can talk with a straight face?
By CharonPDX on 3/20/2014 1:18:21 PM , Rating: 5
quote:
Texas has the best climate in the country to run and grow business because of its low regulations and limited government interference...


"Limited government interference"? You mean like barring companies from selling without forcing them to go through the archaic dealer system?

"Right to work" state? Yet you block companies from operating?

"Pro business" my ass. These slime aren't pro-business, they're "pro businesses that pay lawmakers money."

(Note: I ran a small business, and I saw the hypocrisy and slime of lots of "pro business" groups all the time. Chamber of Commerce? Only cares about you if you pay them. Better Business Bureau? A "businesses that pay us" scam. - by the way, as a consumer, if you ever want to complain about a company that is a BBB member, forget about complaining to the BBB. The BBB is firmly in the pocket of companies that pay them.)




By ven1ger on 3/20/2014 3:38:19 PM , Rating: 2
Wanting to comment on the BBB, not sure about them being in the pockets of companies.

But, I did make a complaint about a credit card company, HSBC (sp?) the one that Best Buy uses and I was upset that it took them one week to process my payments, even though I sent it in several days before it was due, thereby making my payments late at times. I called them and they said they didn't take into account the postmarked date, but when they actually process it. AFAIK, everyone I've dealt with uses the postmarked date to determine if payments were on time. I contacted the BBB in that state to file a report, next day I get a personal call from a person said she was the vice-president of the financial section, and she cleared up any late charges for my account, didn't change the practice they had, but my payments were almost done in a few months anyway, and she did leave me here number to call if I had any other problems.

I don't know if the credit card company was affliated with the BBB, but it helped in my case to get direct action. So, in my case the BBB was helpful.


RE: They can talk with a straight face?
By senecarr on 3/20/2014 3:43:10 PM , Rating: 1
Actually, "right to work" is regulation and government interference. It is telling both companies and people they can't enter into a certain kind of binding contract, one that involves all workers belonging to an organization.


RE: They can talk with a straight face?
By EricMartello on 3/23/2014 2:25:51 PM , Rating: 1
Wow, that is some serious distortion. If the unions lobby the state govt to require that factory workers be union members, THAT is called government interference and that is why right-to-work is great, because it address that issue.

Right-to-Work says that individual employees can CHOOSE whether to join the union or not rather than being forced to join a union, which is better for the company and for employees. It does not prevent a union from attempting to recruit members and negotiate contracts - although when workers are not being forced to join a union just to work, the union will have to stand on its own merit.

Unions serve little purpose these days other than being free votes for democrats...so the fewer of them in existence the better.


By senecarr on 4/3/2014 9:28:21 AM , Rating: 2
You actually don't know how union laws work.
Unions don't lobby state government to make a law that factory workers have to be union workers. Unions form a contract with the factory owners that says, "you will only hire union members." That is a willing contract between two parties, the union, and the company. Right to work is a law saying those two parties may not form that kind of contract. That is not a free market.


RE: They can talk with a straight face?
By Reclaimer77 on 3/20/14, Rating: -1
RE: They can talk with a straight face?
By Rukkian on 3/21/2014 3:03:06 PM , Rating: 3
Texas is about as red of a state as they come, and you say it is because obama was elected that this stuff happened in Texas? You can't really have it both ways. This is not a dem vs rep issue, it is a corrupt politician (is there any other kind) taking bribes (I mean campaign contributions) to pass laws making sure they have a monopoly.


RE: They can talk with a straight face?
By Reclaimer77 on 3/21/2014 3:28:29 PM , Rating: 1
No this has nothing to do with Obama.

I'm just saying you can't support big Government ideology at every opportunity, then get pissed at typical big-Government style market manipulation.

Liberals want to have their cake and eat it too on this issue. They're all fine with anti consumerism and market manipulation, then suddenly want Tesla to be exempt.

The voters, you guys, moved this country far left of center. Well this is what you get.


By tamalero on 3/24/2014 1:02:18 AM , Rating: 1
Irony, as conservatives wants to have control over women's reproductive parts.. but cry foul over how "the government is controlling too much" (when it affects their business or their bible thumping)


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